Suez gains as tankers skirt Hormuz

Egypt’s Suez Canal recorded its strongest monthly revenue since early 2024 as oil tankers turned increasingly to the Red Sea route after the effective shutdown of the Strait of Hormuz disrupted Gulf energy flows.

Revenue from the waterway reached about $419 million in April, up 27 per cent from a year earlier, supported by a sharp rise in tanker crossings and higher net tonnage. The canal handled 1,182 vessels during the month, a 13.9 per cent increase from April 2025, while oil tanker transits jumped 27.8 per cent to 529 ships. Total net tonnage rose 31.4 per cent to 53.6 million tonnes, underlining the weight of energy shipments in the recovery.

The figures mark a notable shift for one of Egypt’s most important sources of hard currency after more than two years of pressure from attacks on commercial shipping in the Red Sea and wider regional conflict. Canal revenue had dropped heavily as container lines and bulk carriers diverted around the Cape of Good Hope, adding time and cost to voyages between Asia and Europe.

The Strait of Hormuz, the narrow waterway linking the Gulf with the Arabian Sea, has been effectively closed since shortly after the Iran conflict erupted on February 28. The disruption has constrained tanker traffic from Gulf producers and forced refiners, traders and shipowners to reassess routing, insurance and security risks. While some cargoes have continued to move through opaque channels, including tankers switching off tracking systems, the risk premium for regular transit has remained high.

For the Suez Canal, the tanker-led rebound has brought relief but not a full return to pre-crisis levels. Around 2,300 ships crossed the canal in April 2023, nearly double the April 2026 count. That gap shows how container shipping, car carriers and other commercial traffic remain cautious about Red Sea security despite the improvement in energy-linked movements.

Egyptian authorities estimate that the disruption has cost the country at least $9 billion in potential canal income. The decline has weighed on an economy already managing high debt costs, foreign currency pressures and a costly import bill. The canal sits alongside tourism, remittances and gas exports as a major earner of foreign exchange, making any sustained recovery important for fiscal and external balances.

The rise in tanker movements also reflects changes in the oil market. Gulf supply uncertainty has pushed buyers to seek alternative barrels and shipping arrangements, while some cargoes that would normally move through Hormuz have been replaced by flows from the Mediterranean, the Atlantic Basin and Red Sea-linked routes. Suez has benefited from that rebalancing, particularly where cargoes can move between Europe, Asia and Middle Eastern ports without entering the Gulf.

Shipping executives remain wary of treating April’s numbers as a lasting normalisation. War-risk premiums, crew safety concerns and uncertainty over regional naval protection continue to influence routing decisions. Major carriers have shown a preference for gradual redeployment rather than a rapid return to routes exposed to missile, drone or maritime attacks. Tankers, however, have more flexible voyage economics than container ships, allowing operators to shift routes more quickly when freight rates and crude differentials justify the risk.

The canal’s improved April performance follows efforts by the Suez Canal Authority to reassure shipowners and preserve traffic during a difficult period. The waterway has continued to offer a shorter route between Asia and Europe than the Cape of Good Hope passage, with savings in fuel, time and vessel availability. Those advantages become more valuable when oil markets are disrupted and refinery margins depend on reliable delivery windows.

The recovery is uneven. Tankers are carrying the rebound, while broader vessel traffic remains far below the levels seen before the Red Sea crisis intensified. Container shipping is likely to be the slowest segment to return at scale because large carriers rely on fixed schedules, alliance networks and predictable insurance cover. A single security incident can force network-wide changes affecting ports, feeder services and inland logistics.