Tension in the Red Sea affects ship movement through the Suez Canal Economy

Bloomberg agency said that commercial ship traffic through the Suez Canal has fallen to its lowest levels since the Ever Given ship closed the waterway almost 3 years ago. The agency indicated that this decrease reflects the significant impact of the existing tension in the Red Sea and the Bab al-Mandab Strait, which has caused global trade to shift to a longer and more expensive route via the Cape of Good Hope in southern Africa.

The agency quoted data revealed by a platform run by the International Monetary Fund and Oxford University that the 7-day moving average for the daily crossing of Suez for cargo ships, container carriers and oil tankers had diminished to 49 as of last Sunday.

This represents a sharp decline from the daily peak of 83 crossings in late June 2023, and is even lower than the 7-day average compared to the previous year, which reached 70 daily crossings.

The current traffic flow is the lightest through the Suez Canal since early April 2021, after the huge container carrier “Ever Given” settled between the two banks of the canal for about a week in late March 2021, causing supply chains to be disrupted for several months with queuing… Ships.

The escalation of attacks by the Yemeni Houthi group on Israeli or Israel-linked ships in the Red Sea region, and the American and British military responses to them, have exacerbated the challenges facing the shipping industry.

The Houthis are targeting Israeli ships to put pressure on stopping the ongoing aggression against the Gaza Strip for more than 100 days, which has caused the death of 24,000 Palestinians and the injury of more than 60,000 others, most of them children and women, in addition to great destruction.

The data, reported by Bloomberg, also highlights a corresponding increase in the number of ships choosing to pass through the Cape of Good Hope.

Bloomberg says that this historic decline in traffic in the Suez Canal raises concerns about the resilience of global supply chains and the vulnerability of major maritime routes. Adding that redirecting ships to longer routes not only leads to higher costs, but also adds complexity to the logistical planning of companies around the world.

The Suez Canal is a major source of foreign currency, of which Egypt suffers a shortage, and the authorities have been striving for years to boost its revenues, including by expanding the canal in 2015. More expansion operations are currently being implemented.