The Suez Canal

What it is

The Suez Canal is a 193-kilometer artificial waterway in Egypt, running from Port Said on the Mediterranean to the city of Suez on the Red Sea. Egypt's Suez Canal Authority (SCA), a state body, owns and operates it. The canal has no locks, because the Mediterranean and Red Sea sit at roughly equal elevations. Ships transit at around 8 knots, taking 11 to 16 hours for a single passage. As of early 2026, the navigable channel is 200-210 meters wide and 24 meters deep, accommodating vessels up to approximately 210,000 deadweight tons. The waterway carries roughly 12 to 15 percent of global trade by value, around 30 percent of global container traffic, and approximately 9 percent of world seaborne oil flows, making it the single most consequential maritime shortcut on earth.

History

Construction began April 25, 1859, under French diplomat Ferdinand de Lesseps, and the canal opened November 17, 1869. An estimated 1.5 million Egyptian laborers worked on the project, many under coercion, and tens of thousands died from cholera and accidents. Britain acquired a controlling stake in the operating company in 1875. Egyptian President Gamal Abdel Nasser nationalized the canal on July 26, 1956, triggering the Suez Crisis: Britain, France, and Israel launched a joint military operation in October 1956 but withdrew under US and Soviet pressure. Egypt closed the canal on June 5, 1967, after Israel struck the Egyptian Air Force at the opening of the Six-Day War. It remained closed for eight years, reopening June 5, 1975, with sunken warships cleared and a new SCA expansion complete. Egypt widened and deepened the channel repeatedly over subsequent decades. In August 2015, Egypt opened a parallel second channel, allowing two-way traffic over a 35-kilometer stretch and cutting average transit waiting time from 18 hours to 11 hours.

Current state

The canal reached peak throughput in 2023, with 26,434 transits recorded, and generated a record US$9.4 billion in toll revenue in fiscal year 2022-23. That run ended sharply when Yemen's Houthi movement began attacking commercial shipping in the Red Sea in late 2023, in stated solidarity with Palestinians during the Israel-Gaza war. Transit numbers fell to 13,213 in 2024 and 12,758 in 2025 as most major carriers rerouted via the Cape of Good Hope to avoid Houthi missile and drone fire. Egypt's canal revenues dropped 45.5 percent to US$3.6 billion in fiscal year 2024-25. A partial Gaza ceasefire in late 2025 reduced attack frequency, but as of mid-2026, traffic remains well below 2023 levels. The severing of undersea cables in the Red Sea corridor in early 2026 compounded the region's fragility, though that event did not directly affect canal transits. War-risk insurance premiums on vessels using the route surged from 0.05-0.1 percent of vessel value before the crisis to as high as 1-2 percent at peak.

Relationships

The canal's southern approach runs through the Red Sea and the Bab el-Mandeb strait, making both chokepoints geopolitically interdependent. Egypt earns roughly US$8-10 billion in peak years from SCA tolls, so the sustained traffic drop since late 2023 has been a significant fiscal shock for Cairo, compressing foreign-exchange earnings at a time of broader Egyptian economic strain. The US-led Operation Prosperity Guardian, launched in December 2023, patrolled the southern Red Sea to deter Houthi attacks but could not restore full traffic. China, the single largest user of the canal by cargo volume as a major importer of Middle Eastern oil and exporter of manufactured goods, has the most at stake from any prolonged closure or route shift.

What to watch

• Whether a durable Gaza settlement restores Houthi restraint and brings major carriers back to Red Sea routing in the second half of 2026.
• Egypt's revenue and foreign-exchange trajectory: a third consecutive low-traffic year would stress Cairo's fiscal position and its ability to service external debt.
• SCA plans for further widening to accommodate next-generation vessels above 24,000 TEU that currently require tide-dependent transits.
• Any Chinese investment talks with Egypt on canal infrastructure expansion, which would deepen Beijing's stake in the corridor's governance.