Suez Canal transit volumes nearing back to pre-2023 levels but insurance premiums still high

Ambassador of Egypt to India, Kamel Galal, told CNBC-TV18 that following the Sharm el-Sheikh Summit for Peace, normalisation has progressed significantly in the Suez Canal. Transit volumes have recovered to 85–90% of pre-2023 levels, according to data from the Suez Canal Authority.

Trade across the Suez Canal was severely disrupted by Houthi attacks and the war in Gaza from late 2023 to early 2025, resulting in a sharp decline in transits.

The Ambassador stated that security enhancements—such as multinational naval escorts under the US-led Operation Prosperity Guardian, now with Indian and EU contributions—and AI-monitored drone patrols have helped reduce incidents in the region.

However, he noted that some Asia–Europe sea traffic continues to be rerouted, while insurance premiums remain elevated. This has contributed to rising prices for several commodities worldwide.

Driven by stabilising geopolitics in the region, he anticipates growth in shipment volumes, reiterating that “the canal’s resilience underscores its irreplaceable role.”

Regarding the proposed India–Middle East–Europe Economic Corridor (IMEC), he emphasised that Egypt’s importance in the initiative cannot be overstated, primarily due to its control of the Suez Canal—a vital artery that handles 12% of global trade.

Describing the canal as a natural gateway between the Mediterranean and the Red Sea, he said Egypt would serve as a strategic pivot for any Europe–Asia corridor, unlocking synergies such as extending rail links through the country to Africa, thereby enhancing IMEC’s scope and resilience against disruptions.

He added that Egypt’s inclusion could encourage broader Arab participation, mitigate geopolitical risks, and promote peace through the corridor.

Launched in 2023 during the G20 Summit in India, the IMEC aims to enhance connectivity between India, the Middle East, and Europe through integrated rail, ship-to-rail, and road networks.

The IMEC promises to reduce transit times by 40% and costs by 30% compared to traditional routes, fostering trade, energy security, and digital infrastructure.