When the Seas Close Their Gates:
Egypt Confronting the War of the Three Straits
Dr. Doha Abdelhamid
International Economic Expert
The captain stood on the bridge of his oil tanker in the Gulf of Oman, staring anxiously at the radar screen. Before him lay the Strait of Hormuz — thirty-three kilometers separating Iran from the Sultanate of Oman — and behind him, a cargo of oil sufficient to power an entire city for weeks. The decision of whether to proceed had long ceased to be a purely nautical one; it had become a decision of war and peace, governed by generals, not navigators.
Thousands of kilometers away, in Cairo, a Ministry of Finance official sat staring at numbers that were shrinking before his eyes: Suez Canal revenues had collapsed from $9.4 billion in 2023 to approximately $5.6 billion in 2024. These were not abstract figures — they were salaries, subsidies, and aspirations evaporating into thin air.
This is the story of the War of the Straits, and what it means for Egypt specifically.
The First Strait: Hormuz — Where Fear Begins
If you wanted to paralyze the global economy in a single moment, all you would need to do is close the Strait of Hormuz. This narrow passage — just 33 kilometers wide between Iran and Oman — is the world’s primary oil artery. Approximately 21 million barrels of oil and liquefied natural gas pass through it every day, representing between 20 and 21% of total global energy trade.
Egypt has no coastline on Hormuz, yet it feels every tremor that occurs there. Every rise in global oil prices translates into a heavier subsidy bill, higher industrial production costs, and inflation that strikes Egyptian wallets long before it appears in Central Bank statistics. Inflation peaked in 2023 at 33.9%, and the tensions around Hormuz played no small part in that equation.
The Second Strait: Bab El-Mandeb — The Stab in the Back
If Hormuz is geographically distant from Egypt, then Bab El-Mandeb — the strait separating Yemen from Djibouti and Eritrea by a mere 29 kilometers — is a direct blow to the heart of the Egyptian economy.
Before the events of 2023–2024, some 17,000 vessels passed through this gateway annually, the vast majority heading northward toward the Suez Canal. When Houthi forces in Yemen began targeting commercial ships, it was not merely a maritime incident — it was a geopolitical decision that struck Egypt at its most vulnerable point. More than 108 tankers and vessels rerouted around the Cape of Good Hope, bypassing the Red Sea and, with it, the Suez Canal.
The result? A net revenue loss to Egypt of $2.2 billion per month in a full-closure scenario. What actually transpired was no less painful: shipping traffic declined by between 250 and 300% during the peak months of the crisis, and canal revenues collapsed by approximately 40% within a single year.
But the story does not end with numbers. Behind every tanker rerouting around Africa, there are Egyptian factories paying more for imported raw materials, a European tourist hesitating over a booking, and a farmer finding that the cost of imported fertilizer has surged once again.
The Third Strait: Gibraltar — When the West Ignites
At the other end of the map — at that narrow point where the Mediterranean draws its Atlantic breath — stands the Strait of Gibraltar: 14 kilometers separating Morocco from Spain, through which approximately 100,000 vessels pass annually. It is the western gateway for everything Europe imports and exports, and the artery connecting Egypt’s exports to the markets of the old continent.
Today, amid escalating tensions across the African Sahel, the expanding Russian presence in Mali, Burkina Faso, and Niger, and the convergence of Iranian interests with certain actors in northwest Africa — a serious question has emerged: could the flames of conflict spread to this far end as well, disrupting Mediterranean navigation? No one can say with certainty, but the prudent policymaker does not wait for catastrophe before asking the question.
The Encircling Triangle: Three Straits and an Anxious Egyptian Heart
When Hormuz, Bab El-Mandeb, and Gibraltar are placed on a single map, Egypt sits at the center — flanked to the east, south, and west by gates that could simultaneously be shut. This is what makes Egypt’s geopolitical situation exceptionally precarious:
• From the East: Hormuz tensions drive up the energy bill and fuel inflation.
• From the South: Bab El-Mandeb disruptions drain Suez Canal revenues.
• From the West: Mediterranean and Maghreb instability threatens trade lines with Europe.
• From the Southwest: Chaos in Sudan, Libya, and the Sahel imposes additional demographic and security burdens.
This geographic encirclement is what makes the War of the Straits an existential threat — in the most literal sense — to an economy that depends on four fragile rentier sources — the Canal, tourism, remittances, and foreign aid — to secure the bulk of its hard currency revenues.
The Silk Road Shifts Course: Who Wins and Who Loses?
While the maritime straits burn, decision-makers in Beijing sit back with a quiet smile. Disruptions in the Red Sea, the Gulf of Aden, and the Strait of Hormuz are providing a powerful impetus to accelerate the overland Belt and Road Initiative — routes that bypass all these maritime bottlenecks and pass-through Central Asia, Iran, and Turkey.
What appears to be a Chinese opportunity carries within it a strategic threat to Egypt: if global supply chains succeed in overland re-routing over the long term, the value of the Suez Canal will gradually diminish. The transition will be neither sudden nor complete — the Canal will continue to attract shipping for decades — but any decline in its share of global trade represents a parallel decline in Egypt’s most important geopolitical asset.
On the other hand, Egypt possesses a rare and as yet unexploited opportunity: to become the meeting point of land and sea — a logistics hub connecting Belt and Road corridors with the Mediterranean and the Red Sea. Alexandria, Ain Sokhna, and Port Said could be transformed into world-class logistics platforms, provided that modern infrastructure and a competitive business environment are put in place.
Egypt and Africa: The Untapped South
There is a striking reality that many overlook: while Egypt is preoccupied with watching the straits to its north and east, an entire continent stretches out before it to the south, teeming with opportunity. Africa, with 1.4 billion people and a unified trade market taking shape under the African Continental Free Trade Area (AfCFTA), could generate more than $500 billion annually in Egyptian exports. Egypt’s current share of this treasure does not exceed 8–10% of its total exports.
More than that: the anticipated reconstruction waves in Gaza, Lebanon, and Sudan — whose total costs are estimated at $100 billion or more — represent a natural market for Egyptian companies in construction materials, logistics, and infrastructure. Egypt is the closest geographically, the most experienced, and the most qualified to be at the heart of this scene — provided it prepares itself in advance.
Egypt and Europe: A Partnership in Need of New Wings
Egypt’s relationship with Europe extends far beyond shipping across the Mediterranean. Europe is the largest importer of Egyptian gas, the principal prospective investor in renewable energy projects, and the partner that signed in March 2024 a support package of €8 billion for the Egyptian economy.
Yet this partnership requires a fundamental strategic upgrade in the context of the War of the Straits: a transformation from a mere shipping corridor and gas market into a genuine industrial partnership — one encompassing the export of solar power and green electricity, and the development of Egyptian manufacturing industries serving European markets. Egypt possesses what Europe needs: sun, wind, space, and labor — and Europe possesses what Egypt needs: financing, technology, and market access.
Egypt could export more than 10 gigawatts of green electricity to Europe via interconnection cables, generating revenues exceeding $5 billion annually by 2030. This is the path forward: from Egypt as a conduit for goods, to Egypt as a producer of energy and an exporter of value.
What Should Egypt Do? Five Keys to Survival
First: Food Security — Build the Reservoir Before the Drought
Egypt imports 70–80% of its wheat requirements, half of which came from Russia and Ukraine before 2022. When that war erupted, global wheat prices surged by more than 70%, and the depth of Egypt’s vulnerability was laid bare. The current strategic reserve stands at no more than 5–6 months — it must be raised to 9 months immediately, alongside a diversification of import sources so that no single supplier accounts for more than 20% of the total.
The radical solution, however, lies in increasing domestic agricultural production: serious investment in modern irrigation technologies and an expansion of cultivated land across Sinai, the North Western Coast, and the New Valley. Egypt has the land, the sun, and the Nile — what it needs now is sustained political will.
Second: Energy — A Treasure Beneath the Feet That Cannot Wait
Egypt sits atop exceptional energy wealth: Mediterranean gas, vast Concentrated Solar Power (CSP) potential to use in the desert — which represents a genuine lifeline — and wind energy along the Red Sea coast and at Gabal El-Zeit. Multiplying investment in these resources is not a future luxury — it is the first line of defense against the energy price spikes triggered by Hormuz tensions. Every megawatt produced domestically is a dollar kept at home, and a margin of safety that reduces the impact of the straits on the national energy bill.
Egypt is targeting a renewable energy share of 42% in the energy mix by 2030 — an ambitious goal that demands acceleration in implementation, not merely in announcement.
Third: Industry and Mining — The Wealth Beneath Our Feet
Egypt holds vast mineral reserves that remain far from fully exploited: gold in the Eastern Desert, manganese in Sinai, silica in the Western Desert, iron ore in Aswan, and black sand deposits along the northern coast containing titanium and zircon. Investing in these resources and transforming them into value-added manufacturing industries — rather than simply exporting raw materials — opens a new stream of foreign currency that passes through no strait and fears no conflict.
Gold production alone could be multiplied several times over with sound investment in Eastern Desert mining. Egypt’s exceptionally pure silica could be channeled into the manufacture of electronic chips and solar panels, rather than being sold cheaply as a raw commodity.
Fourth: The Egyptian People — The Greatest and Most Important Strait of All
There is a fourth strait that no one mentions in the geography of conflict: the strait of human capital. Egypt, with 105 million people — more than half of them under thirty — possesses a human treasure that oil-rich states cannot match. Egyptian talent runs hospitals in the Gulf, builds schools across Africa, and develops software in Europe — but it does so outside its own borders.
Investing in quality education, technical training, and information technology builds a strategic human reserve that can, in times of crisis, compensate for any decline in Canal revenues or tourism receipts. Digital professionals working remotely for global markets need neither to cross Bab El-Mandeb nor Hormuz to add value to their country in its hour of need.
Fifth: Diversification Before the Gates Close
No economy that depends on only four fragile rentier sources can withstand a comprehensive war of straits. Diversification is not an optional luxury — it is an existential imperative: raising non-oil exports from approximately $12 billion to $25 billion by 2027, activating the African trade partnership through AfCFTA, and securing regional and continental reconstruction contracts before others get there first.
Conclusion: The Lesson of the Three Straits
At the end of this intricate story, it becomes clear that the War of the Straits is not about ships, or oil, or even Houthi missiles — it is a profound test of nations’ capacity to build their internal economic resilience in the face of an external environment they cannot control.
Egypt cannot open or close Hormuz, cannot calm or ignite Yemen, and cannot control what happens at Gibraltar — nor at the contested islands, nor along the chain of military bases of the great powers, nor along the Western Sahara front. But it can — and this is the true wager — build from within what makes the turbulent outside less able to shake it.
It can feed its people from its own land, power its homes from its own sun and wind, manufacture with its own hands what it once imported, and sell to Africa and Europe what it holds in natural and human wealth.
The nations that withstand the wars of the straits are those that decided — years before the war arrived — never to make water their only road to life.
