Yemen's Houthi Attacks Disrupt Suez Canal Shipping Routes

London, December 18 - Recent attacks by Yemen's Houthi group on commercial ships in the southern end of the Red Sea have led to the diversion of vessels by several shipping companies. The affected route, which typically passes through Egypt's Suez Canal in the north, connecting to the Mediterranean Sea, is being avoided due to heightened security concerns.

The Houthi group, aligned with Iran, claims that these attacks aim to support Palestinians amid ongoing conflict between Israel and Hamas. The repercussions of these incidents extend beyond maritime security, impacting vessel journeys in terms of both time and cost. The spike in oil prices and war risk insurance premiums serves as an immediate consequence.

Significance of the Suez Canal:

The Suez Canal, spanning 192 kilometers (120 miles), serves as the quickest sea route between Asia and Europe.

It is one of seven strategic choke points crucial for global oil trade, susceptible to blockages and pirate attacks.

Approximately 9.2 million barrels per day, constituting around 9% of global demand, flowed through the canal in the first half of 2023.

About 4% of global LNG imports, estimated at 391 million metric tons in 2023, have passed through the canal so far.

Revenue from tolls paid by shipowners contributes significantly to the Egyptian economy, reaching a record $9.4 billion in the year to June 30.

The canal accommodates over 60% of the total world fleet of tankers when fully loaded, along with over 90% of bulk carriers, container carriers, car carriers, and general cargo ships.

A ship carrying Saudi crude from the Middle East Gulf can reach Rotterdam in 6,436 nautical miles by traversing the canal, compared to 11,169 nautical miles when circumnavigating Africa.

Impact on Canal Navigation:

As of December 17, the Suez Canal Authority (SCA) reported that 55 ships had rerouted via the Cape of Good Hope since November 19, while 2,128 vessels had passed through the canal during the same period.

Major freight firms, including MSC, the world's largest container shipping line, announced their avoidance of the Suez Canal in response to increased Houthi assaults.

On December 17, 77 ships passed through the canal, including some vessels from shipping lines that had announced temporary diversions.

On December 18, oil major BP temporarily halted all transits through the Red Sea.

A Brief History of the Suez Canal:?

The first canal, linking the Mediterranean and Red Seas via the river Nile and its branches, was dug under the reign of Senausret III, Pharaoh of Egypt (1887-1849 BCE).

The current Suez Canal, connecting the Mediterranean Sea with the Gulf of Suez and the Red Sea, was planned by French engineer Ferdinand de Lesseps and opened in November 1869.

Egypt nationalized the canal in 1956, leading to the "Suez Crisis," involving military intervention by Britain, France, and Israel.

In 1967, the Six-Day War resulted in significant damage to the canal, remaining closed until after the 1973 Yom Kippur war.

Egypt regained full control of the canal following the Yom Kippur war, and it was reopened in June 1975.