President Abdel Fattah El-Sisi recently estimated Suez Canal losses at $9 billion over the past two years, underscoring the financial strain on an economy already burdened by rising foreign debt.
A brief uptick in traffic in May had offered a flicker of hope. A 15% discount for large vessels and a temporary lull in Ansar Allah military activity in the Red Sea briefly revived traffic. But that optimism vanished fast. Experts warn that as long as Israel’s war on Gaza rages, instability across the region will persist, keeping full recovery out of reach.
By late May, Israel escalated its military operations in the region, targeting the Yemeni ports of Hodaidah and Salif in direct strikes against the country. The renewed offensive further upended regional shipping routes.
Shipping reroutes persist
Ehab Al-Bannan, head of Clarkson Shipping Agency, told Al Manassa that major global shipping lines remain reluctant to return to the Suez Canal as tensions endure. Even in the event of a ceasefire, in light of the recent Trump-Netanyahu proposal, carriers plan their routes months in advance, delaying any potential recovery.
Disruptions began nearly two years ago, when shippers started rerouting around the Cape of Good Hope to avoid soaring insurance premiums triggered by Houthi missile and drone attacks. According to Suez Canal Authority data, only 3,074 ships passed through the waterway in Q2 2025, compared to 6,856 in the same period of 2023.
A September strike on a Saudi oil tanker in the Red Sea, allegedly attributed by the US to Ansar Allah movement, drove insurance costs even higher. With the Cape route now normalized, Al-Bannan said, the Suez Canal faces an uphill battle to return to pre-October 7 traffic levels.
Despite the longer and more expensive journey, global shipping has largely adapted. Al-Bannan noted to Al Manassa that some carriers have actually increased revenue by up to 64%, thanks to government contracts guaranteeing delivery of critical goods.
Container traffic falls sharply
Canal throughput remains depressed. Only 133 container ships transited the Suez Canal in July, with August numbers expected to follow suit. That’s a dramatic plunge from a monthly average of 500 container vessels before the Gaza war.
Egypt’s latest balance of payments report paints a grim picture: Suez Canal revenues dropped by more than half, from $5.7 billion (July 2023–March 2024) to $2.6 billion (July 2024–March 2025).
Tariq Zaghloul, an executive at French shipping giant CMA CGM, said his company continues to use the canal as a main route and has benefited from the 15% discount extended by the Suez Canal Authority through the end of 2025.
Zaghloul emphasized that the discount makes the canal more competitive compared to the Cape route. While rerouting adds fuel and time costs, he stressed that political risk remains the core concern. A rebound, he said, depends entirely on ending the war and de-escalating regional tensions.
Medhat El-Kady, head of the International Transport Division, echoed that assessment to Al Manassa. He called the Suez Canal the most efficient strategic route in the long term and urged carriers to monitor security conditions closely. As diplomatic efforts to end the war in Gaza gain traction, he said, shipping companies should prepare for a phased return.
