Egypt political instability has impact on the Suez Canal revenues

By Finance

Recent unsuccessful attack on a container vessel sailing trough the Suez Canal 12 days ago. The complicated political situation in Egypt is affecting traffic volumes.  

Suez Canal authorities inform that the canal is staying away from the rising sedition emerged since President Mohamed Mursi was ousted 2 months ago. The situation in Egypt has after all is having an impact on the traffic. Sedition in the Port of Said region "scared" the vessels. After the confidence in the President returned, ships continue using the waterway with decline only 6% for the first 6 months of the year.

The crisis over the US strike on Syria could affect also the traffic in the Suez Canal. The Tamarod movement that provoked the protests against the Egypt President has insisted for the waterway to be closed to Syria-bound warships. The Suez Canal is threatened by various political movements and there is a small chance to be blockaded.

Shipping companies can reconsider alternatives routes such as the Cape of Good Hope instead, which could stop of foreign exchange from Egypt’s economy. The Suez Canal authorities are claiming that the passage trough the canal is safe and the political situation will not affect it.

Only few businesses are worried about the political tension in the region. For example Lloyds of London is insurer and works with ship passing trough the canal, connection between the Red Sea and the Mediterranean, but the company is not concerned about its business.
There is also maritime insurers like such as Skuld that inform crew members to be more careful.

- Port operations restricted in the dark hours of the day.
- Oil prices rose slightly.
- 3% of the oil supply in the planet goes through the Suez Canal.
- 8% of the global trade transits the waterway.
- The canal will still remain open even the political tension rises more.