Houthi pressure on Red Sea shipping threatens Egypt’s Suez Canal revenues

The Houthis’ growing presence around the Bab el-Mandeb Strait is putting pressure on Saudi Arabia while creating fresh economic risks for Egypt, whose Suez Canal income depends on maritime traffic. DW reports that Cairo is likely to favor diplomacy as it weighs its alliance with Riyadh against the dangers of further disruption.

The Houthi militia’s expanding presence along Yemen’s coast and around the Bab el-Mandeb Strait is raising concern over the security of one of the world’s key maritime routes, according to DW. A Houthi spokesperson said ships could initially pass through the Red Sea, except those from Saudi Arabia, the group’s declared adversary.

The Houthis control Mayun, also known as Perim, a small volcanic island at the southern entrance to the Red Sea, as well as sections of Yemen’s coastline and other islands. The Bab el-Mandeb is a strategic chokepoint between Yemen and the Horn of Africa; vessels must pass through it to reach the Red Sea and, for many journeys between Asia and Europe, the Suez Canal.

Traffic has not yet collapsed. Reuters, cited by DW, reported that 24 ships crossed the strait on one Saturday and 27 the following Sunday, broadly in line with the 10-day average. However, maritime intelligence organization Kpler recorded 21 ships on the following Monday, compared with an average of 47 in the middle of July. Stephan Roll of the German Institute for International and Security Affairs told DW that the Houthis could interrupt or significantly disturb the Asia-Europe connection, although the ultimate effect on the Suez Canal remains uncertain.

Egypt is particularly exposed because the canal is a major source of national income. DW reported that canal earnings fell by about $6 billion in 2024, according to the International Monetary Fund, after Houthi attacks disrupted shipping at the end of 2023. The Suez Canal Authority later reported a 23% rise in revenue to $4.67 billion during the 2025-2026 fiscal year, suggesting a recovery before the latest concerns.

A further deterioration in regional security could compound the problem. Think tanks cited by DW have warned that simultaneous risks in the Persian Gulf and Red Sea would leave neither route a dependable independent alternative for oil and trade. Steffen Krüger of the Konrad Adenauer Foundation said Egypt’s military capabilities were limited, while Roll said Cairo would probably try diplomacy. The New Arab reported that the Houthis had offered direct talks on shipping security, but that Egypt rejected the proposal because it feared appearing to recognize Houthi authority.

Egypt remains formally part of the Saudi-led coalition opposing the Houthis, although Krüger described its participation as largely symbolic. With Saudi Arabia seeking Cairo’s backing and Egypt vulnerable to any decline in shipping, DW said the country faces a difficult balancing act and is likely to wait and see how broadly the Houthis restrict maritime traffic.