The Houthis’ Red Sea Attacks and Growing Economic Woes in Egypt

Abstract

The Israel–Hamas war, which began following the Hamas terrorist attack on Israel on October 7, 2023, has unsettled many of the geopolitical notions about the Middle East. One critical consequence of the war has been the disruption of the global maritime trade route after the Houthis in Yemen entered the war in solidarity with Hamas. Houthis targeting the ships and the vessels passing through the Bab al-Mandab turned the Red Sea into a theatre of war. It created a crisis for global maritime trade, particularly the Suez Canal route, which, along with tourism and remittances, constitutes the principal source of revenue for Egypt. As tensions in the Red Sea escalated, many shipping companies have opted to sail around the Cape of Good Hope, depriving the Egyptian government of billions of dollars in revenue. This article examines the evolution of the Red Sea crisis, its impact on global shipping routes, and the high costs it imposes on shipping companies. It then analyzes the impact of disruptions to traditional sea routes on the Suez Canal’s revenue and how these disruptions have compounded the woes of Egypt’s already staggering economy.