Suez Canal

Overview

The Suez Canal is a sea-level waterway across Egypt that connects the Mediterranean Sea with the Red Sea. Ships using it can travel between European and Asian markets without sailing around Africa’s Cape of Good Hope. The canal opened in 1869 and became one of the world’s principal maritime trade routes. Roughly 12 percent of global trade has passed through it, including energy, raw materials and consumer goods. Its transit tolls provide Egypt with foreign currency, making secure navigation important to both the Egyptian economy and international supply chains.

The canal’s importance has also made it a focus of diplomacy and war. Egyptian restrictions on Israeli shipping followed the establishment of Israel in 1948 and continued after the 1949 Egypt–Israel armistice. President Gamal Abdel Nasser nationalized the canal company in 1956, precipitating the Suez Crisis. War closed the waterway after 1967; it reopened in 1975. More recently, a six-day obstruction by the container ship Ever Given in 2021 and Houthi attacks on Red Sea shipping after 2023 demonstrated how disruptions at the canal or its approaches can affect trade far beyond Egypt.

Geography

The canal crosses the Isthmus of Suez along the western edge of the Sinai Peninsula. Its northern entrance is at Port Said on the Mediterranean. Its southern end reaches the Gulf of Suez and the Red Sea. Sinai lies between the canal and Gulf of Suez to its west, the Mediterranean to its north, the Red Sea to its south, and Israel and the Gulf of Aqaba to its east. This setting makes the canal a passage between two seas and a strategic boundary between the Nile Valley and Sinai.

Ships approaching from the Indian Ocean enter the Red Sea through Bab el-Mandeb, the passage between Yemen and the Horn of Africa, before sailing north to Suez. Conditions at that southern entrance therefore affect traffic at the canal’s northern end. A vessel diverted around the Cape of Good Hope must take a substantially longer route. For an illustrative voyage from Taiwan to the Netherlands at 30 kilometers per hour, the route through Suez takes about 25.5 days, compared with about 34 days around the Cape. Such differences influence freight schedules, fuel costs, insurance and the availability of ships and containers.

The canal’s geography gives Egypt both economic opportunity and exposure to events outside its territory. Canal cities depend on shipping, port services and associated industry, while transit fees bring in foreign currency. Security threats in Sinai can endanger facilities near the waterway. Attacks near Bab el-Mandeb can reduce traffic even when the canal itself remains open. The Red Sea route also gives ports such as Port Sudan strategic value to states seeking access between the Indian Ocean and Mediterranean.

Jewish history

The canal changed trade patterns after its opening in 1869. Greater use of maritime routes between Europe and India strengthened the port economy of Basra. Economic improvement in Baghdad during the same period helped raise the standing of its Jewish community. The canal’s later importance to Jewish history centered on Israel’s access to international shipping and to its southern port of Eilat.

Egypt began restricting Israeli shipping after Israel’s establishment in 1948. Egypt and Israel signed an armistice at Rhodes on February 24, 1949, intended to end hostilities, but the canal restrictions continued. In the early 1950s, Egypt blocked Israeli vessels from passing through the canal and also restricted navigation through the Straits of Tiran. The latter measures cut Eilat’s direct maritime access to the Red Sea. Ships carrying goods between Israel and Asia faced longer, more costly routes to Israel’s Mediterranean ports, including Haifa. The restrictions prolonged hostility despite the armistice and conflicted with the canal’s free-navigation principles.

The 1888 Suez Canal Convention provided for passage by commercial and naval vessels without distinction of flag in war and peace. On October 13, 1956, the United Nations Security Council unanimously adopted principles requiring nondiscriminatory transit and separation of canal operations from national politics. These principles directly addressed the contention that Egypt’s conflict with Israel justified excluding Israeli vessels or cargo. The dispute persisted after the 1956 war: Egypt continued to bar Israeli vessels, although foreign ships sailing to or from Israel were permitted until March 1959.

Egypt then extended its restrictions to Israeli exports carried aboard foreign vessels. Israeli Foreign Minister Golda Meir challenged the continuing blockade before the United Nations General Assembly on September 24, 1959. In December, Egyptian authorities detained the Greek ship Astypalea in the canal and confiscated its cargo of Israeli cement, shipped from Haifa to Eritrea. Meir addressed the incident in the Knesset on December 22. The case showed that the dispute concerned cargo as well as the flag of a ship. That same month, the World Bank approved a $56 million loan to the Suez Canal Authority while Egypt continued obstructing Israeli shipping.

Modern history

Construction of the modern canal began in the nineteenth century under a company backed by French and British interests. Tens of thousands of Egyptian peasants were pressed into labor. Workers died from hunger, thirst, disease and abuse during construction. The waterway opened in 1869. It redirected a substantial share of Europe–India trade toward routes through the Mediterranean and Red Sea, making control of the passage a major concern for maritime powers. The Suez Canal Company operated the waterway from its opening until Egypt nationalized it in 1956.

The canal became central to Britain’s position in the eastern Mediterranean and Egypt. Its proximity also increased British strategic interest in the Land of Israel after the Sykes–Picot Agreement. In 1905, Britain’s agent in Egypt, Lord Cromer, sought to move the Ottoman–Egyptian border farther from the canal. By the mid-twentieth century, Britain’s large Canal Zone garrison and the canal’s role in oil supplies and Western trade made arrangements for its control a matter of international politics.

On July 26, 1956, Nasser nationalized the Suez Canal Company after international financing for the Aswan Dam was refused. The decision transferred control of the waterway from the British-French company to Egypt and threatened British and French commercial and strategic interests. Diplomatic efforts followed. On September 9, U.S. Secretary of State John Foster Dulles proposed a Suez Canal Users’ Association to operate the canal. The proposed body would have included 18 major maritime nations and given Britain, France and Egypt equal stakes. On October 13, the Security Council adopted its six principles for canal operation, including nondiscriminatory transit and insulation from national politics.

Negotiations did not prevent war. Israel, Britain and France coordinated a campaign against Egypt in 1956, but their objectives differed. Israel sought free navigation through international waters and an end to attacks from Egypt. Britain and France sought control of the canal. During Israel’s Sinai offensive, its forces advanced to within about 10 miles of the waterway without reaching it. British and French ground forces landed beside the canal on November 5 and moved south, presenting their landings as an effort to protect it from the fighting. On November 7, the United States and Soviet Union issued separate ultimatums that forced Britain and France to halt their attempted seizure. Their troops withdrew from the Canal Zone in December, and the canal remained in Egypt’s possession.

The 1967 war brought another prolonged interruption. The canal closed following the fighting and became a military front between Egypt and Israel. Egyptian artillery shelled Israeli positions along it in the months after the sinking of the Israeli destroyer Eilat. During the subsequent War of Attrition, fighting damaged the canal cities and displaced their residents. Principal Egyptian cities beside the waterway were devastated, and about one million residents were evacuated deeper into Egypt. In 1970, Menachem Begin argued that an extension of the canal ceasefire should be conditioned on a peace treaty recognizing Israel.

The canal front was again central to the 1973 war. Egyptian forces crossed the waterway and broke through Israeli front-line positions. Israel’s defense had relied heavily on strongholds beside the canal to stop an invasion. Later in the war, Israeli forces under Ariel Sharon crossed to its western bank, a defining episode in Israel’s reversal of its early losses. The canal remained closed until 1975. Reopening restored a major route for commerce, though its history showed how quickly military conflict could interrupt passage.

Egypt undertook another major project under President Abdel Fattah el-Sisi. The New Suez Canal expansion, inaugurated in August 2015, included a 72-kilometer branch completed in one year rather than the three initially projected. Egyptian citizens bought investment certificates that raised about $8 billion in eight days. The project aimed to move more and larger ships through the waterway more quickly and to develop nearby industrial, logistics and service zones. Its plans also sought jobs for residents of Port Said and other canal cities. El-Sisi’s government presented the expansion as evidence of national capacity and a means to strengthen its public legitimacy and Egypt’s international standing. Developing the associated economic zone continued to depend on attracting investment, reducing bureaucratic obstacles and training workers.

Security

Security of the canal depends on conditions along its banks, in Sinai and throughout the Red Sea approaches. Islamic State’s Sinai Province, a terrorist organization, carried out two major attacks near the waterway in 2022. On May 7, its operatives attacked an Egyptian military post protecting a water-pumping station about 26 kilometers east of the canal. An officer and 16 soldiers were killed. The attack raised concern that the organization was moving closer to the canal and other infrastructure essential to Egypt’s economy.

On November 18–19, 2022, Sinai Province operatives seized government buildings, including a school, in eastern Al-Qantara near the canal and exchanged fire with Egyptian forces. At least five soldiers were killed. The incidents did not close the waterway, but they illustrated the risk posed by armed attacks near a route on which international trade and Egyptian revenue depend.

Threats farther south can have similarly wide effects. Yemen borders Bab el-Mandeb, the Red Sea’s southern entrance. From late 2023, the Houthis, a terrorist organization backed by the Iranian regime, attacked commercial shipping in the Red Sea. Companies diverted vessels around the Cape of Good Hope to avoid the danger, reducing traffic bound for Suez. In November 2023, the Israel-linked Guardian Leader sailed from Thailand toward Spain around Africa rather than through the canal. The United States announced Operation Prosperity Guardian on December 18, 2023, to help protect navigation in the Red Sea, Gulf of Aden and Bab el-Mandeb.

The diversions disrupted schedules and strained ports, shipping capacity and equipment supplies. By April 2024, the Houthi attack campaign had contributed to an approximately 90 percent decline in Red Sea container shipping. In September 2024, Maersk reported that Suez Canal traffic had fallen 66 percent since shipping companies began diverting vessels. Egypt’s canal revenue fell sharply during the disruption, with one assessment putting the decline at 70 percent for the period examined. These figures describe different measures and periods, but together show how attacks near the Red Sea entrance can damage trade through a canal that remains physically open.

Present day

The canal remains a principal link between Asian producers and European markets and an important source of revenue and national prestige for Egypt. Its value also makes it vulnerable to accidents. In March 2021, the container ship Ever Given ran aground and blocked traffic in both directions for six days. Hundreds of vessels carrying cargo worth billions of dollars were stranded. Lloyd’s List Intelligence estimated the blockage’s cost to the global economy at $9.6 billion. It was the canal’s first complete traffic obstruction since its 1975 reopening and renewed attention to the fragility of tightly scheduled supply chains.

The grounding also renewed interest in possible routes across Israel between Eilat and the Mediterranean. Such a land bridge could offer another way to move some cargo between the Red Sea and European markets when canal traffic is disrupted. Its practical value would depend on port capacity, land transport and costs. Because canal income is important to Egypt, Israeli planning would also need to account for Egyptian interests and relations between Jerusalem and Cairo. Construction and increased traffic in southern Israel would require attention to environmental effects. Israeli and Egyptian interests can also meet in protecting shipping and addressing ecological damage caused by species moving through the canal from the Red Sea to the Mediterranean.

Alternatives do not remove the canal’s geographic advantage. The route around Africa takes longer, while proposed overland and maritime corridors require infrastructure, dependable borders and sustained commercial demand. For Egypt, improving canal services and the surrounding economic zone offers potential jobs and investment alongside transit tolls. For shipping companies, the 2021 grounding and subsequent Red Sea attacks have made reliable passage, insurance and route flexibility continuing concerns. The canal’s future importance therefore rests on both its physical capacity and security across the wider passage from Bab el-Mandeb to the Mediterranean.