Suez Canal revenues plummeted by 64.3% year-on-year in May, reaching only $337.8 million due to ongoing instability in the Red Sea, according to Egyptian media reports. The number of ships passing through the canal has also dropped significantly, with only 1,111 vessels traversing the waterway last month, a 54% decrease compared to May 2023.

The decline in maritime traffic is largely attributed to attacks by Yemen’s Ansar Allah group, also known as the Houthis, who have been targeting ships in the Red Sea since November in response to the conflict in Gaza. The impact of these attacks has been felt across the region, with Saudi Arabia reporting an 8% year-on-year decrease in maritime traffic and a 10% drop in handled containers.

In a recent incident, a Liberia-flagged bulker sustained severe damage after being struck by an unidentified object in the southern part of the Red Sea. The vessel is reportedly taking on water in its engine compartment. 

Despite hopes for a ceasefire in the Palestinian territory, companies are likely to remain cautious about resuming transits through the Red Sea, even if an agreement is reached in the Gaza Strip.

Advisory and broking company WTW has warned that attacks are highly likely to continue over the next six months, as the Houthis have sufficient stockpiles of weaponry, despite US airstrikes on their positions in Yemen. 

The ongoing instability in the region continues to have a significant impact on global shipping and the economies of countries relying on the Suez Canal for trade.

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