Incio>Blog>Ocean Cargo > Navigation at Risk: Attacks in the Red Sea Redirect Traffic from the Suez Canal

Navigation at Risk: Attacks in the Red Sea Redirect Traffic from the Suez Canal

The recent assault by the Houthi group from Yemen on commercial ships in the southern Red Sea has triggered substantial consequences in the maritime navigation realm, particularly in the area of the Suez Canal. This article will explore how these attacks have led various shipping companies to redirect their vessels, bypassing the route that traverses the Suez Canal and its connection to the Mediterranean Sea.

The Houthi group, aligned with Iran, has claimed that their attacks aim to support the Palestinians amid the conflict between Israel and Hamas. This situation has forced transport companies to reconsider their usual routes, introducing additional costs and prolonging travel times. This scenario has resulted in a significant increase in both oil prices and war risk insurance premiums.

What is the Suez Canal?

This 192 km (120 miles) waterway represents the most efficient maritime route between Asia and Europe.

It ranks among the seven critical geographic points for global oil trade, susceptible to blockades or pirate attacks.

According to the U.S. Energy Information Administration, around 9% of global oil demand, equivalent to about 9.2 million barrels per day, transited through the canal in the first half of 2023.

Nearly 4% of global liquefied natural gas (LNG) imports, estimated at 391 million metric tons in 2023, have passed through this canal.

Impact on Canal Navigation:

Since November 19, 55 vessels have opted for the route around the Cape of Good Hope instead of traversing the Suez Canal.

Major shipping companies, including MSC, the world’s leading container line, have announced the temporary avoidance of the Canal due to Houthi attacks.

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

Prominent companies, such as BP, temporarily suspended all transits through the Red Sea on December 18.

Brief History of the Suez Canal:

The first version of the canal was built under the reign of Senausret III, Pharaoh of Egypt (1887-1849 B.C.), connecting the Mediterranean Sea and the Red Sea via the Nile River.

The current version, conceived by French engineer Ferdinand de Lesseps, was completed in 1869 and separates Africa from Asia, providing the shortest maritime route between Europe and regions around the Indian Ocean and the western Pacific.

Egypt nationalized the canal in 1956, triggering the “Suez Crisis” with the intervention of the United States, the Soviet Union, and the United Nations.

After its closure during the Yom Kippur War in 1973, Egypt regained full control and reopened the canal in 1975.

In conclusion, the current landscape presents substantial challenges for navigation in the Suez Canal due to attacks in the Red Sea. With the increasing diversions and disruptions in this key trade route, the economic and logistical impact continues to unfold. Shipping companies are expected to assess strategies to mitigate additional costs and maintain efficiency in maritime transport.