Menu Close

Suez canal blockage could be used by Israel/UAE to justify their new trade route

The ongoing blockage of the Suez Canal, which occurred this past Tuesday, has caused a financial catastrophe and could open up the way to justifying a newly proposed trade route between the UAE and Israel – especially with the Egyptian President silent on the issue.

The 200,000-ton “Evergreen” ship, the size of the empire state building, first became logged in the Suez Canal, blocking almost $10 billion worth of cargo passage per day, after taking a peculiar route in the Red Sea.

It is currently unclear exactly how this unprecedented blockage was caused and is awaiting an investigation. However, despite the conclusion of future inquiries into what brought about this trade catastrophe, what is already understood are some of the possible implications of the incident.

There has been some speculation over the incident being used as a means of arguing for companies to depend upon different supply routes, which could affect the Chinese hold on such routes. But perhaps what is more concerning is the already discussed change in trade routes that this could help pave the way too.

Some analysts have speculated upon the possibility of new trade routes in the North from Russia into Europe being depended upon more frequently. Yet this would seem to put too much power in the hands of another State hostile to the West. Instead, it is most likely that we will see this Suez incident used for a different purpose, one pertaining to the plans of Israel and the UAE.

The Coming Threat To Egypt’s Economy From Israel & UAE

The Suez Canal generates roughly five and a half billion per year in revenue for the Egyptian economy and is a source of national pride for Egyptians, due to the wars fought in order to re-establish their sovereignty over it. The Canal also provides the quickest possible route to Europe from Asia, and is without competition in this regard, allowing goods to be transported through it, up to Port Said and then across the Mediterranean.

Egyptian Dictator Abdel-Fatteh Sisi had expanded the Suez Canal in 2015, promising a double to the revenue delivered through it to the Egyptian economy, but unfortunately that spike in revenue never quite came to be. In fact, with this blockage having just occurred, it is almost a slap in the face to the Egyptian leader after a failure to meet projections as to how his expansive measures would fuel the country.

Now, it seems that another slap in the face is on its way. But this time, it has little to do with military coup leader Sisi’s failed projects and instead with his allies Israel and the United Arab Emirates.

Since last year’s normalisation deal between Israel and the UAE was signed, plans have been brewing for a new pipeline project, which will work to compete with the Suez Canal. Israel has signed a deal to establish a new trade route with the UAE, which will see the transfer of Emirati oil up through Israel to Europe. Instead of utilizing the Suez, the oil will be transported through the Strait of Tiran and up into the port city of Eilat. From the Red Sea port city of Eilat, in southern Israel, the oil would then travel through a pipeline to the Mediterranean port city of Ashkelon.

According to the Egyptian Suez Canal Authority head, Osama Rabie, this Israeli-UAE project is cause for concern. Rabie stated, in January, that traffic through the Suez Canal could decrease by up to 16% due to the newly agreed upon UAE-Israel pipeline deal. This is especially due to the newly competing gateway to Europe from Asia, reaching its destination quicker than the Suez route and also costing less.

Perhaps the most interesting aspect of this blockage of the Suez Canal, is the point that it makes about the advantage that the Israeli trade route will provide. On September 5, 2020, Foreign Policy Magazine interestingly pointed out that:

“The pipeline’s advantage over the Suez is the ability of the terminals in Ashkelon and Eilat to accommodate the giant supertankers that dominate oil shipping today, but are too big to fit through the canal.”

A future plan by Israel for another trade route project, called the New Hejaz Railway, which would directly link the UAE, Saudi Arabia and Israel, is also a threat to the Suez Canal’s source of revenue, providing another alternative through Israel to the Mediterranean.

Adding another layer on top of an already complicated situation, Egypt has entered into a maritime partnership with China, as part of its ‘New Silk Road’ initiative. Although this does secure Egypt, in terms of maintaining major usage of the Suez Canal, it also attracts further conflict with the West which seeks to undermine China.

The attempt by the Mainstream Media to switch the conversation to alternative trade routes and supply chains is an interesting one, indicating that Western countries are interested in making the most out of the blockage. If anything, it points to a cheap shot taken in a moment of crisis, demonstrating a politicization of the incident.

So far, we have no idea what exactly led to such a chaotic circumstance, but one thing is for sure, we can see how the situation is going to be used by international players. For now, to speculate on how the blockage occurred would be a fruitless endeavor as there is a lack of evidence to support all available theories that have been speculated upon.

What is important, however, is to get ahead of the game when it comes to how this situation is going to be used, by whom, and who this now benefits.

Article: Suez canal blockage could be used by Israel/UAE to justify their new trade route

 

Leave a Reply

Your email address will not be published.