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CAIRO —Egypt's economy is facing serious hurdles after revenue from the country's most strategic asset - the Suez Canal - has dropped by nearly half. Attacks by the pro-Iranian Houthi militia group on ships passing by Yemen has made merchant ships avoid the Red Sea and the canal.
The Greek-flagged grain ship Sea Champion was slightly damaged Wednesday by two ballistic missiles fired by the northern Yemen-based Houthi group, which says it is attacking Western ships in solidarity with Hamas militants fighting Israel.
Because of such attacks, many ships that normally pass by Yemen, headed to or from the Suez Canal, now avoid the area and take the longer route around the Horn of Africa.
That is cutting deeply into Egypt's revenue from ships passing through the canal and is just the latest challenge to the country's economy, Egyptian President Abdel Fatteh el-Sissi said.
First, el-Sissi said, were the two years of the COVID-19 pandemic. Then the Russia-Ukraine conflict added to economic issues, as well as pressure from conflicts in border countries of Libya, Sudan and Gaza. Now, el-Sissi said, Egypt is seeing Suez Canal revenue of approximately $10 billion a year decline by nearly 40% to 50%.
Said Sadek, a professor of political sociology at the Egypt-Japan University of Science and Technology in Alexandria, said Egypt isn't the only country affected by fewer ships transversing the canal.
"If the conflict continues," he said, "supply chains all over the world will be affected, especially since many of the cargoes that pass through the canal are oil and gas ships heading to Europe, and that will make the European economy suffer a lot."
Joshua Landis, who heads the Middle East studies program at the University of Oklahoma, tells VOA the conflict in Gaza has had repercussions on many Middle East fault lines, in addition to the Red Sea conflict affecting world shipping.
"It's ratcheted up the war between Iran and the U.S., it's increased violence in countries like Iraq and Syria, along borders that had become stalemates," he said. "It's increased instability from one end of the Middle East to the other. It's like throwing a firecracker into the middle of a beehive.
Landis said that Iran, which controls many of the proxy militias that are participating in far-flung corners of the Gaza conflict, "has the United States by the short hairs," pulling it into conflicts, not only with the Houthis in Yemen, but also with Shi'ite militias in Iraq and Syria.
Paul Sullivan, a Washington-based Middle East and energy analyst at the Atlantic Council, warns the Houthis are not deterred by any of the U.S. and British retaliatory airstrikes that have been made against them. He said that may indicate "that they have more sources of financing, training and weapons than was previously known."
"Yemen," Sullivan added, "has been at war for a good part of its history [and] many of those involved with the attacks are battle-hardened. They also live by a mountain code, which rules out not responding to threats like many others have."