Heightened tensions around the Strait of Hormuz, triggered by conflict involving Iran, alongside persistent threats from Houthi militants in the southern Red Sea, are pushing a growing number of vessels to reroute through Egypt's Suez Canal.

The waterway's revenue surged 42% year-on-year in July, according to the latest figures. Data from Egypt's state statistics agency, CAPMAS, shows 1,340 ships transited the canal in July, a 27% increase compared to the same month in 2025 and up from 1,208 vessels in June. This continues the partial rebound that began earlier this year. Tanker traffic was notably strong, with 526 vessels passing through, up from 485 the previous month.

The increase in traffic is partly attributed to Saudi oil exports being redirected to Red Sea routes following the blockade at Hormuz. Additionally, with the Houthis issuing fresh attack warnings, many ships are choosing to exit the Red Sea northward through the Suez Canal rather than risk passing through the Bab el-Mandeb Strait, another critical chokepoint.

CAPMAS data indicates that canal revenue reached $505 million in July, marking the highest monthly total since December 2023. For context, the canal's traffic had plummeted dramatically in early 2024 when the Houthis, seeking to pressure Israel over its military actions in Gaza, escalated attacks on international shipping in the southern Red Sea.

As the shortest maritime route between Europe and Asia, the Suez Canal has traditionally been one of Egypt's three primary sources of foreign currency, alongside tourism and remittances from citizens working abroad.

In a recent local television interview, Osama Rabie, Chairman of the Suez Canal Authority, projected that the canal's full-year revenue would climb to between $5.8 billion and $6 billion, up from $4.1 billion anticipated for 2025.

Despite the recent uptick, both the number of transiting vessels and revenue levels remain significantly below pre-Gaza war figures. CAPMAS data shows that canal revenue hit a record $10.2 billion in 2023, when approximately 2,300 ships passed through in April alone.

Mohamed Abu Basha, Head of Macro Analysis at Egypt's EFG Hermes investment bank, suggested that the recovery trend is likely to continue in the coming months, citing the rerouting of oil exports toward Asia and the announcements from several European shipping lines resuming certain Red Sea routes.