What are the possible scenarios for the Suez Canal dealing with Red Sea threats?
The Egyptian Suez Canal General Authority’s announcement that “navigation traffic in the canal has declined by 30 percent” has renewed questions about possible scenarios for the canal’s handling of security threats in the Red Sea, especially in the wake of the attack launched by the United States of America on sites belonging to the “Houthi” group in Yemen. Friday morning.
While experts in Egypt suggested that “the scenario of navigation traffic returning to normal soon in the Suez Canal is the most likely scenario during the coming period.” Cairo continues its contacts with shipping companies to resume navigation traffic in the canal.
The head of the Suez Canal General Authority, Lieutenant General Osama Rabie, said in televised statements, on Thursday evening, that “the canal’s dollar revenues have decreased by 40 percent since the beginning of the year compared to 2023, after the Houthi attacks in Yemen on ships led to their sailing route being diverted away from this.” Waterway.
Rabie added, “ship transit traffic declined by 30 percent in the period from January 1 to January 11 on an annual basis.” He explained that “the number of ships crossing the Suez Canal has decreased to 544 ships so far this year, compared to 777 ships in the same period last year.”
The Suez Canal is one of the main sources of hard currency in Egypt, and its revenues last year amounted to $10.3 billion, according to official statistics.
Container ship belonging to “MSC” (E.B.A.)
Big ships
Major cargo ships changed their course to circle the Cape of Good Hope, following security threats from the Houthi group to ships passing in the Red Sea, in response to the continuation of the Israeli war in the Gaza Strip.
The head of the Suez Canal General Authority said, “Only the ships that are forced to complete their journeys quickly have diverted their course around the Cape of Good Hope, while the other ships are waiting for the situation to stabilize.” He expected: “A large portion of the ships will return after the situation stabilizes, especially since the Cape “Good Hope is not the way to go, especially in winter.”
The Houthi attacks in the Red Sea caused a decline in global trade by 1.3 percent during the past two months, according to a report by the German “IFW” Institute for Economics, while major shipping companies such as the Danish “Maersk” and the German “Hapag-Lloyd” sent… , its ships on longer and more expensive voyages via the Cape of Good Hope route around Africa.
In turn, the Egyptian national security and African affairs expert, Major General Mohamed Abdel Wahed, expected that “navigation traffic in the Suez Canal will return to normal soon.” He told Asharq Al-Awsat that “although the canal is currently being affected, there are not many concerns about it,” explaining that “it is not in the interest of the West and major shipping companies to disrupt navigation in the Suez Canal because this has major impacts on the cost of global shipping and increases its duration.” . He added: “The West will not bear this cost, nor will it disrupt the access of oil tankers to Europe, and the major countries will certainly seek to secure navigation in the Red Sea.”
Navigation insurance
The former director of the Naval College in Egypt, Major General Muhammad Ibrahim Khalil, agreed with the previous opinion. He told Asharq Al-Awsat that “traffic will soon return to normal in the Suez Canal, and the major shipping companies will not bear the cost of changing the route,” noting that “the decision of a number of major shipping companies to stop navigation in the canal is nothing but an attempt to put pressure on Major countries to secure the shipping corridor in the Red Sea.
In this context, the German shipping company Hapag-Lloyd reported that “the attacks launched by the Houthis on ships in the Red Sea caused it to incur additional monthly costs estimated at tens of millions of euros.”
The German News Agency quoted a spokesman for the group as saying, on Friday, that the attacks “affect the entire industry and the company greatly as well.” He added, “The delays resulting from the transfer through the Cape of Good Hope are enormous, as they delayed flights to the United States by an additional week, to Europe by an additional two weeks, and to the eastern Mediterranean by an additional 18 days.”
At dawn on Friday, the United States and Britain launched strikes on targets in areas under the control of the Houthis in Yemen. The strikes came after a UN Security Council resolution, on Wednesday evening, condemning the Houthi attacks on ships, and in the context of the “Guardian of Prosperity” coalition formed by the United States to protect navigation in Red Sea last month.
An American destroyer in the Red Sea to protect navigation (AFP)
Geopolitical goals
Here, Abdel Wahed said, “Egypt has a conservative position on the (Guardian of Prosperity) coalition. It distances itself from involvement in attacks inside Yemen, and it does not want to be a member of an alliance to protect Israelis.” He added, “The United States exaggerated the (Houthi) attacks in the media to obtain a Security Council resolution in a dangerous escalation that granted countries whose ships are being attacked the right to defend themselves, which is unprecedented in international law. Therefore, Russia protested and requested a meeting to be held to investigate the attacks on Yemen,” pointing out that “the coalition’s primary goal is to be present in the region to achieve geopolitical goals within the framework of a competition between Russia and China on the one hand, and the United States and the West on the other hand.” He pointed out that “the Security Council resolution ignored the main reason for the Houthi attacks, which is the war in Gaza.”
This was confirmed by the former director of the Military College, saying, “The United States is targeting the (Guardian of Prosperity) coalition to be present in the region under the guise of protecting navigation in the Bab al-Mandab Strait.” He pointed out that “the Houthi group’s attacks did not aim to disrupt navigation as much as they did to fight Israeli ships and those heading to Eilat.”
Following the US-British attacks on Yemen, the shipping companies Maersk and Hapag-Lloyd welcomed the measures aimed at securing the region, but they did not indicate whether “this would lead to the return of navigation to the Suez Canal.”
Market reactions to the US strikes on Houthi strongholds were initially limited on Friday, but oil prices rose while tensions shook US Treasury bonds and stock markets after the strikes, according to Reuters, which quoted analysts as saying that “investors will seek to reduce trading.” “With riskier markets and increased safe havens.” Shipping data from the London Stock Exchange Group and the Kpler platform for global trade information showed that at least four oil tankers have diverted from the Red Sea since the strikes carried out by the United States and Britain on Houthi targets in Yemen.
Madbouly discussed with Maersk on Thursday the resumption of navigation in the Suez Canal (Egyptian Cabinet)
Return security
Abdul Wahed does not expect the Houthi group to escalate its attacks in the Red Sea or against the United States. He said, “The group was able to prove its presence as an important figure in any future settlement in Yemen, and Iran is expected to advise it not to escalate.”
While shipping companies await the return of security to the Red Sea, Cairo continues its efforts to restore normal navigation in the Suez Canal, through visits and communications with major shipping companies.
But Abdel Wahed believes that “the influential actor in the decision of the major shipping companies is the United States,” noting that “the decision to stop flights through the Suez Canal was under American pressure, and their return will also be the same.”
Egyptian Prime Minister, Dr. Mostafa Madbouly, held a meeting on Wednesday evening with Maersk officials to discuss ways to resume navigation in the Suez Canal, where Cairo stressed “the centrality of navigation security in the Red Sea in light of its close connection to the Suez Canal.”
2024-01-13 10:10:30
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