Egypt weighs effect on Suez Canal from attack on Saudi tankers
CAIRO - Egypt downplayed the effects of an attack by the Iran-backed Houthi militia on two Saudi oil tankers and a subsequent decision by Riyadh to suspend crude oil shipments through the strategic Bab el Mandeb Strait and to the Suez Canal.
“Canal traffic was more than normal a day after the attack,” said Suez Canal Authority spokesman Tarek Hassanein “There is no need for worry.”
The Houthi militia attacked two Saudi oil tankers off the western coast of Yemen on July 25, causing what Saudi authorities described as “minor damage” to one of the tankers.
Egypt strongly condemned the attack on the Saudi oil tankers, calling it a “flagrant violation” of the freedom of navigation in international lanes. “The attack will have negative consequences on the international trade movement,” the Egyptian Foreign Ministry said in a statement.
The tankers, carrying a total of 2 million barrels of crude oil, were en route to markets in Europe and Asia. After the attack, Saudi authorities suspended crude oil shipments via the Bab el Mandeb-Red Sea-Suez Canal route. Kuwait said it would consider making a similar decision, ringing alarms in Cairo, which is dependent on transit fees from the Suez Canal.
Revenues from the canal in the third quarter of the 2017-18 fiscal year were up 10.6% compared to those in the same quarter of the previous fiscal year, said Egypt’s Central Agency for Public Mobilisation and Statistics.
On July 26, 54 tankers, vessels and ships transited the canal in both directions, the canal authority said. Forty-seven vessels registered to transit the canal on the following day.
Authority Chairman Mohab Mamish said the Houthis’ attack was neither the first nor the last.
“These attacks happened several times in the past and the canal had not been affected,” Mamish told the Egyptian news channel ON Live. “The canal is well secured by the Egyptian Army.”
Egypt’s economic development plan is strongly focused on utilising the Suez Canal region and turning it into an engine for economic growth. Egypt has an ambitious plan to turn the Suez Canal region into a magnet for international investment, including numerous industrial and logistical zones.
Threats to navigation in the Red Sea and the Bab el Mandeb Strait would imperil those plans.
“So far, Egypt is keen to act within the framework of international legitimacy,” said Kamal Amer, chairman of the Defence and National Security Committee in the Egyptian parliament. “It will then act in a way that goes hand in hand with its strategy and national security interests.”
There are fears insurance companies could raise rates for vessels transiting the Suez Canal, something that Egypt’s authorities sought to play down.
“These areas do not include either Egypt or the Suez Canal,” Hassanein said.
About 4.8 million barrels of oil each day cross from the Arab Gulf through the Suez Canal to markets in Europe or indirectly to SUMED pipeline in Egypt.
“The case will be very bad for Egypt, especially if more countries are tempted to suspend shipments through the Bab el Mandeb Strait,” said maritime navigation expert Ahmed al-Shami. “Egypt needs to coordinate with the international community and other Arab states before taking any action to protect its own interests.”