Houthi Advance Threatens Egypt's Suez Canal and Vital Economic Interests
The advance of the Houthis near Bab al-Mandab threatens Egypt's Suez Canal, jeopardizing billions in annual revenues and dealing a severe blow to the Egyptian economy.
The advance of the Houthis along the Yemeni coast and the possibility of establishing broader control around the Bab al-Mandab Strait pose a direct threat to Egypt's Suez Canal, threatening its economy and regional influence.
Strategic Threats to Cairo
Prof. Ahmed Ousal, a geopolitical and Middle East relations researcher from Qatar University, argues that Cairo has two supreme strategic interests: the Nile and the Suez Canal. According to Ousal, if the Red Sea route is blocked from the south, it will severely impact traffic through the canal and result in the loss of billions of dollars in revenue.
The first issue is the Nile. If the water stops, one hundred million people will remain hungry and thirsty. The second issue is the Suez Canal, Egypt's most important geopolitical card, Ousal stated.
He estimates that if the Red Sea closes, Egypt could lose annual revenues of 7 to 8 billion dollars. However, he assesses that at this stage, the Houthis will not rush to broadly damage shipping traffic to avoid an immediate and extensive international military intervention.
The Impact on the Egyptian Economy
Egyptian fears are far from theoretical. Since the outbreak of the Red Sea crisis, numerous shipping companies have chosen to divert vessels around the Cape of Good Hope. By mid-2024, shipping via the Cape of Good Hope surged by 89% compared to late 2023, while traffic through the Suez Canal dropped by 70%, according to UNCTAD data.
By March 2026, daily diversion rates reached a peak of 116%. Egyptian President Abdel Fattah el-Sisi has already stated that the country has lost approximately 10 billion dollars in canal revenues due to attacks on ships in Bab al-Mandab and regional crises.
Experts point out that Bab al-Mandab is not merely a distant strait at the southern tip of the Red Sea; it is the vital gateway enabling ships to reach the Suez Canal. If this gateway becomes too dangerous, one of the foundational pillars of the Egyptian economy is directly undermined.
