The Suez Canal’s annual revenue dropped by almost a quarter in its latest financial year as some shippers switched to alternative routes to avoid attacks by Iran-aligned Houthis in the Red Sea. 

Osama Rabie, the head of the Egyptian canal’s authority said on Thursday revenues fell to $7.2 billion in its 2023-24 financial year from $9.4 billion the year before. 

Since November, the Houthis have been attacking commercial vessels in the Red Sea and Indian Ocean to show support for the Palestinian militant group Hamas in its fight against Israel. 

Rabie said the number of ships using the canal fell to 20,148 in 2023-24 from 25,911 the year before. 

The Suez Canal is a key source of foreign currency for Egypt, and authorities have been trying to boost its revenues in recent years, including via an expansion in 2015. 

The canal is vital for global trade, handling a large portion of goods like oil and gas, with its tolls and services crucial to Egypt’s income, supporting infrastructure, jobs, and economic stability. 

About 15 percent of world shipping traffic transits via the Suez Canal, the shortest shipping route between Europe and Asia. 

A statement issued by the Egyptian Cabinet in May revealed that the Suez Canal Economic Zone had secured 144 projects worth $3.2 billion between July 2023 and April 2024, down from $4.9 billion recorded between July 2022 and May 2023. 

This happened as there was a 50 percent drop in Suez Canal trade and a 32 percent decrease in trade through the Panama Canal during the first two months of 2024 compared to the previous year, as reported by the International Monetary Fund in a March blog post. 

At that time, Walid Gamal El-Din, chairman of the General Authority for the Suez Canal Economic Zone, disclosed that out of the 144 projects in its industrial zones and ports, 67 had received final approvals, with 77 securing initial approvals. 

He added that more than 25,000 direct and indirect job opportunities would be created upon the completion and operation of these projects. 

Furthermore, the chairman disclosed that the implementation rates of investment projects within the industrial zones had reached 77 percent, while those in ports had reached 71 percent.