The Suez Canal is a waterway in Egypt used to move ships between the Mediterranean Sea and the Red Sea, connecting Europe to Asia without sailing around the entire continent of Africa. About 15 percent of all global maritime trade passes through it, making it one of the most important commercial corridors on the planet. On an average day, roughly 50 ships carry between $3 billion and $9 billion worth of cargo through its waters.
A Shortcut Between Two Seas
Before the canal existed, any ship traveling from Europe to Asia had to sail south around the Cape of Good Hope at the tip of Africa, a route that added thousands of miles and weeks of travel time. The canal eliminates that detour entirely. A vessel traveling from London to Mumbai, for example, takes a dramatically shorter path by cutting straight through northeast Egypt rather than looping around an entire continent.
The idea of connecting these two bodies of water is ancient. The Egyptian pharaoh Senausert III of the Twelfth Dynasty first attempted a version of it, linking the Red Sea and the Mediterranean through the Nile and a series of lakes to promote trade between East and West. The modern canal, completed in 1869, was a far more ambitious engineering project. Ferdinand de Lesseps secured the first concession from the Egyptian government in 1854, granting him the right to establish a company that would dig and operate the canal for 99 years. Egypt was guaranteed 15 percent of the company’s annual net profit, and the canal’s founding terms declared it “open forever, as neutral passages, to every merchant vessel,” with equal treatment for all countries.
What Moves Through the Canal
The canal’s primary function is moving energy and raw materials. Oil tankers make up the largest share of traffic, accounting for about 46 percent of total tonnage. Bulk carriers hauling goods like grain, coal, and iron ore represent roughly 26 percent. Liquefied natural gas (LNG) ships account for another 7 percent. The remainder includes container ships carrying manufactured goods, vehicles, electronics, and consumer products moving between factories in Asia and markets in Europe and North America.
This mix of cargo reflects the canal’s role as a lifeline for global energy supply chains. A significant portion of the oil and gas that Europe imports from the Persian Gulf passes through the canal. When that flow is interrupted, the effects ripple through fuel prices and supply chains worldwide.
How Ships Pass Through
The canal stretches roughly 193 kilometers (120 miles) across the Isthmus of Suez. Unlike the Panama Canal, it has no locks. Ships simply sail through at sea level, which means the canal can accommodate much larger vessels. The maximum permitted draft is about 20 meters (66 feet), and ships can be up to 400 meters long and 77.5 meters wide. Anything longer requires special permission from the Suez Canal Authority.
Even so, some of the world’s largest supertankers are too heavy when fully loaded to fit through. Those ships either offload part of their cargo to other vessels or pipelines before transiting, or they skip the canal entirely and take the long route around Africa.
A full transit from one end to the other takes about 11 to 15 hours, depending on conditions and traffic. In 2015, Egypt completed a major expansion that added a 35-kilometer parallel channel, allowing two-way traffic in parts of the canal for the first time. That upgrade cut waiting times from 8 to 11 hours down to about 3 hours, and the Suez Canal Authority planned to nearly double the canal’s daily ship capacity from 49 to 97 vessels by 2023.
A Revenue Engine for Egypt
Transit fees paid by shipping companies generate billions for Egypt’s economy. In recent years, the Suez Canal Authority has brought in roughly $3.9 billion to $4.2 billion annually. That revenue makes the canal one of Egypt’s most important sources of foreign currency, alongside tourism and remittances from Egyptians working abroad. The $8.2 billion expansion completed in 2015 was designed to increase that income by accommodating more and larger ships.
The 1956 Crisis and Egyptian Nationalization
For most of its early history, the canal was controlled by a joint British-French company despite sitting on Egyptian soil. That arrangement became a flashpoint in 1956 when Egyptian President Gamal Abdel Nasser nationalized the Suez Canal Company, offering full financial compensation but asserting Egyptian sovereignty over the waterway. Britain and France, unwilling to lose their grip on such a strategic asset, coordinated with Israel to invade. Israeli forces attacked across the Sinai Peninsula on October 29, advancing to within 10 miles of the canal. Britain and France landed their own troops days later under the pretext of “protecting” the waterway.
The Eisenhower administration, alarmed by the prospect of a wider war that could draw in the Soviet Union, pushed back hard against its own NATO allies. The United States voted for U.N. resolutions condemning the invasion and pressured Britain and France into accepting a ceasefire on November 6. The crisis ended European colonial influence over the canal for good and reshaped the power dynamics of the Middle East. Egypt has controlled the canal ever since.
What Happens When the Canal Stops
The canal’s importance becomes most visible when something blocks it. In March 2021, the container ship Ever Given ran aground and wedged itself across the channel, halting all traffic for six days. The disruption cascaded through global supply chains immediately. The shipping giant Maersk alone lost nearly $89 million, with $76 million of that coming from the cost of holding container inventories that couldn’t move. The Suez Canal Authority itself lost $5.9 million in revenue as ships rerouted around Africa.
More recently, attacks on commercial ships in the Red Sea by Houthi forces beginning in late 2023 forced many shipping companies to avoid the canal altogether, rerouting around Africa and adding roughly two weeks to voyages between Asia and Europe. The disruption demonstrated once again that the canal isn’t just a convenience. It is a chokepoint that, when closed or threatened, raises shipping costs, delays deliveries, and strains supply chains that much of the world depends on for energy, food, and manufactured goods.