Suez Canal traffic shows signs of recovery amid Red Sea stability

The Suez Canal Authority (SCA) has observed a slight revival in shipping activity, with 47 vessels choosing the canal over alternative routes since early February. This shift follows a relative reduction in attacks by Yemeni Houthi rebels in the Red Sea, driven by a temporary ceasefire between Israel and Hamas.

SCA chief Osama Rabie noted that shipping companies are reconsidering the canal, opting against the lengthier and costlier Cape of Good Hope route. He expressed cautious optimism, citing ongoing discussions with shipping lines that suggest stability may be returning to the region.

The Red Sea had become a hazardous passage since late 2023 due to attacks on commercial vessels by Iran-backed Houthi militants, severely impacting Suez Canal revenues. The crisis forced many global shipping firms to reroute, resulting in a staggering 60% decline in canal income, with projected losses of up to $7 billion for the fiscal year ending in June.

Rabie previously estimated that canal traffic could stabilize by late March and fully recover by mid-year, assuming continued geopolitical stability. The recent uptick in vessel movement signals a potential turnaround, but long-term recovery remains uncertain amid fluctuating regional tensions.