Suez Canal traffic soars as Hormuz disruptions reroute energy trade

The Suez Canal has seen oil tanker traffic surge by almost a third in April, driving revenue to its highest level since early 2024, as the US-Israel-Iran war and the disruptions in the Strait of Hormuz reroute global energy flows.

What happened: Some 529 tankers transited the Suez Canal in April, up 28% from a year earlier, according to data from Egypt's state statistics agency, CAPMAS. Overall traffic also increased, with 1,182 vessels of all types passing through the waterway during the month, a 14% increase compared with April 2025.

The canal generated $419 million in revenue in April, up 27% year over year and its highest monthly total since early 2024, before Iran-backed Houthi rebels in Yemen stepped up attacks on commercial vessels in the Red Sea in response to the Gaza war, prompting many shipping companies to reroute ships away from the Suez Canal and dealing a major blow to revenues.

Why it matters: The rise in traffic through the Suez Canal highlights how the US-Israel-Iran war, which began on Feb. 28, has reshaped global trade flows. The Strait of Hormuz, a narrow waterway separating Iran from Oman and linking the Gulf to the Arabian Sea, typically carries about a fifth of global oil and LNG shipments. However, the conflict has led to a near-total shutdown of the waterway amid attacks on commercial vessels by Iran's Islamic Revolutionary Guard Corps and a US blockade of Iranian ports, forcing energy exporters to seek alternative routes.

Gulf producers, particularly Saudi Arabia and the UAE, have increasingly relied on pipeline networks that bypass the Strait of Hormuz and connect to export terminals on the Red Sea and Gulf of Oman. The disruption has also reshaped global trade patterns, forcing buyers and sellers to reroute cargoes through alternative shipping corridors, including those connected to the Red Sea.

The rebound in Suez Canal traffic is also significant for Egypt, as the waterway remains one of the country's most important sources of foreign currency, generating around $4 billion a year. Cairo has spent the past several years trying to recover from an economic crisis triggered by the COVID-19 pandemic and the fallout from Russia's invasion of Ukraine, which fueled inflation, depleted foreign currency reserves and saw the Egyptian pound lose more than half its value against the dollar. While the economy has stabilized following an IMF-backed reform program, Gulf investment and financial support from international lenders, the additional hard-currency revenue is providing a welcome boost as Egypt looks to consolidate recent economic gains.

The rebound in traffic comes as the Suez Canal Authority moves to increase transit surcharges for the first time in three years. The new fees, which take effect July 15, will apply across most vessel categories and could alter the economics of transiting the waterway if traffic remains elevated. 

The fees will vary by vessel type, with crude oil and product tankers facing some of the steepest increases. The surcharge on those vessels will rise from 25% to 37%, while ballast vessels will see fees increase from 15% to 27%.

Surcharges for LNG and chemical carriers will increase from 20% to 32%, while fees for LPG carriers will rise from 7% to 19%. Dry bulk cargo vessels will see their surcharge more than double, from 10% to 22%. Container ships will continue to pay a 12% surcharge. Meanwhile, fees for general cargo, heavy-lift and roll-on/roll-off vessels will increase from 14% to 26%, while car carriers will face a 26% surcharge on northbound voyages and 12% on southbound trips.

Know more: On Tuesday, Suez Canal Authority Chairman Osama Rabie announced that the giant container ship CMA CGM Vendome transited the waterway on its maiden voyage as part of a northbound convoy traveling from Malaysia to France. The 400-meter vessel is among the largest container ships in operation, with a gross tonnage of 244,000 tons and a capacity of up to 24,000 20-foot equivalent units, according to a statement by Rabie.