Posted on 12/22/2023 5:05:33 AM PST by bert
If all traffic in the Suez Canal stopped, Egypt would lose about $13 million daily, disrupting its main foreign currency income.
In light of the constant Houthi attacks on commercial vessels sailing near Yemen’s coasts, several shipping companies have announced in recent days that they will halt their ship flow through the Suez Canal until sailing in the Red Sea is safe again.
If this domino-like trend continues, Egypt could face massive foreign currency income losses and devaluation of its currency. Furthermore, if the situation continues for long enough, alternative trade routes could become more frequented.
Since the beginning of the Israel-Hamas war on October 7, the Houthi militia in Yemen has been actively participating by constantly launching rocket and drone attacks against Israel. As part of its offensive, the Houthis have also attacked several commercial vessels sailing close to its coasts in the Red Sea, even those ships that have no link to Israel.
The impact of the Houthi attacks As a result of the Houthi attacks, several large shipping companies recently announced that they would avoid using the Suez Canal.
Oil giant BP announced on Monday that it would stop its oil transports via the Suez Canal. MSC, the world’s biggest container shipping line, and French shipping group CMA CGM both announced on Saturday. Additionally, Denmark’s A.P. Moller-Maersk stated the same on Friday, and Hapag Lloyd, a German container line, said it might do the same.
Jack Kennedy, associate director and head of the MENA Country Risk Desk at S&P Global Market Intelligence, told The Media Line that the total revenues of the Suez Canal in 2023 were $9.3 billion, and if all shipping lines would decide to halt their usage of the Canal, the Egyptian government would lose approximately $13 million per day.
“The main issue here is that the transit fees are a significant source of dollar revenue for the Egyptian government,” he said, stressing that this is one of the most pressing upcoming issues for the North African state to address in 2024: how Cairo will service its extensive foreign debt.
Kennedy adds that the long-term consequences of sustained insecurity for commercial vessels to reach the Suez Canal could foment the creation and permanent use of alternative transit routes.
“The Egyptian government is likely very concerned by reported plans to establish a logistics and trade corridor from India, via the UAE, Saudi, and Jordan, to the Mediterranean via Israel,” Kennedy said. Noting that this plan is not new, he emphasized that such a trade route, if established, would inevitably reduce transits through the Suez Canal.
“A sustained period of disruption and security risk in the Red Sea approach to the Suez Canal will probably make such projects more attractive to potential member states and investors, if no less vulnerable to disruption from missile or UAV attack,” he continued.
Kennedy noted that the Biden Administration had been putting political capital on this plan before the October 7 attacks and that statements from Hamas suggest that disruption to this plan, a facet of wider normalization with Israel, was a geopolitical motivator.
Egypt’s Suez Canal Authority’s chairman, Osama Rabie, said on Sunday during a statement that his country is closely monitoring the flow of vessels in the Red Sea. The statement came after four shipping companies announced that they would avoid using the Suez Canal until the Red Sea is safe again.
Ships are seen at the entrance of the Suez Canal, Egypt March 26, 2021. (credit: MOHAMED ABD EL GHANY/REUTERS) Ships are seen at the entrance of the Suez Canal, Egypt March 26, 2021. (credit: MOHAMED ABD EL GHANY/REUTERS) Rabie mentioned that since Nov. 19, only 55 vessels have rerouted via the Cape of Good Hope route and compared it with 2,128 ships that passed through the Suez Canal in that same period. However, since this statement was issued, more shipping companies have joined the halt of ship flow through the Suez Canal for the time being.
A global issue Dr. Noha Bakr, an advisory board member of the Egyptian Center of Strategic Studies, warned that this is not only Egypt’s problem. She said that if the vessel traffic through the Red Sea and the Suez Canal halts partially or totally, it will have a great effect on global trade.
Bakr told The Media Line that such a halt can put further pressure on several world economies, affecting global supply chains and fuel security since the Suez Canal is a vital corridor for global trade. That is why she believes that the Houthi threat to the security of the Red Sea should be addressed by the international community.
The route from the Persian Gulf to Northern Europe is about 13,000 miles if a ship sails around Africa, which takes some 24 days. If the ship uses the Suez Canal, the trip is reduced to some 7,400 miles, which takes about 14 days. Such a difference in shipping time represents a huge delay in the supply of the transported goods, which could impact their availability and therefore their price.
Kennedy said that according to industry estimates, transits of the Suez Canal account for around 12% of global trade and 30% of global container traffic.
“Our data shows shipments from Asia and the Gulf to Europe or MENA by sea, which predominantly travel via the Suez Canal, represent 14.8% of global trade and 69% of all imports to Europe or MENA from Asia and the Gulf states,” he said.
He believes that it is likely that the Egyptian government will be coordinating with the United States to establish a broader maritime coalition to solve this insecurity problem in the Red Sea.
As for the Houthi motivation to attack vessels that are not linked to Israel, Kennedy believes that there is a geopolitical agenda behind it. “The Houthi—and by extension their main military backer Iran—are probably using their strike capability in the Red Sea to further exercise greater geopolitical influence in the region and on Israel’s war in Gaza,” he said.
It is also reported that the various shipping companies have been advised that their vessels and cargo will not be insured during the Suez Canal Transit.
Iran is doing in the Red Sea what it has repeatedly threatened for the straights of Hormuz. All Iranian ports should be blockaded for the foreseeable future. The Kark Island oil shipping facilities should be destroyed and Iran put out of business.
Iran has panicked and is using all the surrogate force capability available. Iran is losing. Iran is in full panic mode. Allah has deserted the Mullahs.
The fiction of Iranian surrogates, like Hamas must be ended forever.
A franchise of Islam ties up Western Civilization commerce.
Like the days of yore.
Egypt could end the situation but that’d be against their brothers.
Crazy idea but how about the US bring back some manufacturing.
Using the Danish navy to protect the assets of a Danish shipping company makes a lot of sense. These calls for “the international community” to address the problem should be dismissed out of hand as a joke.
I know that’s what you think but the calls are effective and various international navies are in fact in place to convoy shipping.
To call the effort a joke is just ignorance
The calls for involving “the international community” are aimed at getting countries — basically, the United States — involved even if they have no legal or diplomatic basis for getting involved.
Doesn’t work. You are trying to justify your foolish post by twisting words to suit your purpose. There are international navies patroling the Red Sea.
Two of the international navies include France and Japan both of which aqre reported to have downed Houthi attack air craft
Egypt has a navy. it seems like it should be using it to protect its national interests.
BS neo isolationist claptrap
You do not know what Egypt is doing or not doing.
Under your criteria, the "international community" is already operating there ... which means this statement from the article would make no sense if the term was used in your context and not mine:
That is why she believes that the Houthi threat to the security of the Red Sea should be addressed by the international community.
Again, you jump to a conclusion without merit
What “conclusion” have I even made here?
The Houthis... which happen to be allies to Iran/Hamas... Iran/Hamas which happen to be allies to............. Russia.
The Hamas attack on Israel deflects Western resources from the protection of Europe’s borders now under attack by Russia. Who is the main beneficiary of that situation? Russia is.
The Houthis attacks on the Suez shipping activities complicates energy and and goods deliveries to Europe. So here we go again, WHO is the main beneficiary of that situation? Russia is.
It’s all crystal clear. We are now already in pre WWIII tensions all over the planet. Russia’s attack on Ukraine ignited this whole mess. Russia’s allies all over the planet are now deeply engaged in the Kremlin’s offensive plans.
Oh sure! It's crystal clear.
Maybe "crystal clear" to some naive poor fool who has no direct knowledge of the situation and sucks information into their simple little brain that the government, CNN, NYT, WAPO, alternate media, along with the rest of our corrupt media, and leaders spoon-feed to them.
To anyone who has a modicum of ability to think for themselves, it is obvious that the first rule of propaganda is to create an enemy or boogie man. Our government has done that exceptionally well.
How many times have we seen it....
-Putin/Russia
-Iraq/Saddam Hussein
-Afganastain
-Iran
-Vietnam
- etc...
I'm not saying all the above are innocent, but give me a break. Don't you see the pattern?
Exactly how do you know all these stories you read and words you hear from our government are true? After all, what were we told about....
- COVID
- Hunters laptop
- No stolen election
- 1/6 riots and coup
- WMDs in Iraq
- Vietnam -- the commies are coming
- and more -- much more
How about focusing our energy on solving the serious problems we have right here at home that we can see with our own two eyes.....
- $33 trillion in debt -- and growing
- Invasion over our border
- Crumbling infrastructure
- A failing and indoctrinating education system
- A two-tier justice system
- Out of control crime in our cities
- Homeless camps across our nation
- and more -- much more
Sure, Mr. Brainsurgeon/Rocket Scientist, continue to believe the stories you are told -- not what you can see with your own two eyes.
Fools are leading us, and it seems you're falling for their stories and blame game hook, line and sinker.
Your answer is not based on logic and is non-sensical.
You say that “I have been told lies” and that I’m naive when I confirm public domain / common knowledge that the Houthis are indeed attacking Western interests in the Suez area, that indeed the Hamas/Iran (allies to Russia) have attacked our Israeli allies, that indeed Russia has blatantly attacked our Ukrainian allies.
And that indeed IRAN/RUSSIA is officially an alliance - boasted by Putin himself (!), and that indeed they are supporting Hamas and Houthis.
Thus, obviously and logically they are orchestrating their operations all around the planet - against Western interests.
All of the above are facts. Republicans, Democrats, Patriots, Independents have never contested those facts in any way!
So what on earth are you talking about?
Take some extra coffee and ucclearly.
Way to go hot-shot!
Keep believing your excellent, logical sources like Republicans, Democrats, Patriots, Independents -- whoever they are. You know. The same groups that told us to shut down the economy for a week, that 1/6 was an insurrection, that Hunter's laptop was a Russian hoax, and hookers peed on Trump's bed in Moscow, along with a host of other lies. You know. Right?
By the way, please show us your information that everyone in your admired groups is on board with your crazy logic.
And they have such an excellent track record to admire....
- $33 trillion in debt and growing exponentially
- $1 trillion in woke and failed military spending
- Got us into failed wars that were disasters
*Afganastain
*Iraq
*Vietnam
And they are driving us vigorously down the same rabbit hole with Ukraine/Russia, Israel, and now Iran -- just as they have done so many times before.
Just continue to follow your flawed logic and admired groups. It has worked out so very well. Right?
Smart logic, you've got there. Real smart.
I think you and I are are talking about separate things.
I was talking about current war or war-like events going on right now against out allies Israel and Ukraine. I don’t say I like it or not. Who cares about my personal feelings? When I am simply cofirming what the whole world is witnessing, in what does that make me naive?
Im trying to understand what your point is.
You seem to contradict the facts here below I have put forward. Thus, according to you:
- Russia has not attacked Ukraine.
- Israel has not been attacked by Hamas.
- The Houthis are just chillin in their hammocks, and are not attacking any Western Cargos.
You are denying pure facts. Why, for what reason?
When is comes to the other things you said about wokeness and our high debt issue, evidently I agree that those are big problems, for America and the West in general. But that’s another subject which has nothing to do with what I posted.
Wether we have a massive debt or zero debt... wether we are woke or not woke... it doesn’t change the fact that Russia has INDEED invaded parts of Europe. Right? That the Houthis are INDEED attacking our cargos, Right? That Hamas has INDEED attacked Israel, right?
Contesting those facts is simpy absurd.
Sure. Let me help you out.
Thus, according to you:
- Russia has not attacked Ukraine.
- Israel has not been attacked by Hamas.
We agree those events occurred. But ask the question, "Why?"
What was the reason for those attacks? Was there provocation? Was there a reason, and what was that reason? In other words, what is the other side of those stories, from a reliable source or directly from the other side?
We attacked Vietnam, Afghanistan, Iraq, Libya, Hungary, etc. What was the rationale? We are told you can't invade a sovereign. Are there two sides to those stories?
We almost went to nuclear war in the '60s and invaded a sovereign country because we didn't like nukes off our coast. What was the other side of that story? We were told we had a moral right to do that.
My point is we are being manipulated and spoon-fed one side of a story by known liars. In many (most), they are all a pack of lies designed to convince us of our moral superiority and justify goading the public into certain actions while avoiding the real problems we face.
The stories we are told always include an evil boogie man, and we are morally right. Don't you see? Are we really?
If you don't believe it works, read Saul Alinsky's book Rules for Radicals. It sure worked for our beloved Obama.
Believe the narrative if you wish. It's your choice -- but not mine.
“...which happen to be allies to............. Russia.”
Worse than TDS.
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