Egypt’s Suez Canal Authority has invited vessels damaged by Houthi strikes in the Red Sea to use its shipyards for repairs as transit prices through the vital international waterway continue to rise.
The authority’s chief Admiral Osama Rabie, in a statement on Monday, said its dry docks and workshops were ready to receive ships that may have been hit while navigating Bab Al Mandeb, a narrow passage into the Red Sea that brings ships directly in the line of Houthi fire.
The Red Sea and Suez Canal account for about 12 per cent of global maritime trade worth up to $1 trillion a year.
A Maltese-registered dry bulk carrier Zografia, which was hit by a Houthi strike on January 16 while entering the Red Sea, is being repaired by the Suez Shipyard, a company affiliated with the authority.
Repairs to the 190-metre vessel, which was escorted to the shipyard by a convoy of tugboats, include significant work on its hull and addressing internal and external damage it sustained in the attack, Admiral Rabie said.
While the Houthi attacks are aimed at punishing Israel for its bombardment and ground operation in the Gaza Strip, which has killed more than 25,000 people, they have disproportionately affected cash-strapped Egypt, which heavily relies on foreign currency paid by ships traversing the Suez Canal to run its economy.
Canal revenue hit a record of more than $9 billion last year, while the country's 2023-2024 budget is $97.4 billion.
As the Arab world’s most populous nation grapples with one of the worst financial crises in its history, its need for US dollars, a necessity for the country’s import-heavy economy, has never been greater.
Transit fees have already increased significantly last year due to several shipping companies halting their journeys through the Suez Canal, choosing instead to send vessels on the longer route round the Cape of Good Hope, Africa’s southernmost point.
However, longer-than-average shipping times have increased risks of cargo spoiling. This has made exporters raise prices to accommodate for the risk to their bottom line, while additional fuel costs also take a toll.
Despite the formation of a US-led military coalition to counter the Houthi attacks on the Red Sea, US President Joe Biden on January 19 said that though the retaliatory strikes would not stop the Iran-backed rebels, they would be continuing nonetheless.
On January 17, the US said it would list the Houthis as a specially designated global terrorist organisation, limiting the rebel group's ability to access funding as it continues to attack international shipping in the Red Sea.
