A drone attack on two gas tankers in Egyptian waters near the port of Damietta on July 29 has heightened concerns about the security of the Suez Canal and the nearby Sumed pipeline, critical routes for Saudi Arabian oil exports. The incident, which took place in a branch of the Nile Delta close to the Mediterranean, underscores increasing risks to key energy supply pathways amid ongoing tensions linked to the conflict involving Iran and its allied Houthi forces.

No group has claimed responsibility for the strike. However, Iran and the Houthis have previously targeted shipping lanes, particularly through the Strait of Hormuz and Bab el-Mandeb, which are vital chokepoints for global oil flows. Since the onset of hostilities in the region, Saudi Arabia has rerouted much of its crude oil exports from the Gulf through the Red Sea and the Yanbu terminal to avoid these volatile areas. Yet, recent Houthi threats and attacks on tankers transiting Bab el-Mandeb have curtailed traffic there, prompting a growing share of oil shipments to divert northward via the Red Sea toward Egypt’s Suez Canal and the Sumed pipeline.

Data from market intelligence firm Kpler shows that crude volumes transported through the Sumed pipeline nearly doubled in July, rising to 28.79 million barrels from 19.52 million barrels in April. This shift effectively bypasses the southern maritime choke points but entails longer voyages for Asian customers, who must now route shipments around Africa instead of through the Gulf of Aden.

The increased traffic is visible at the canal’s Mediterranean end, where around 30 ships were anchored near Port Said as of July 30, compared to about 20 earlier that week, according to ship-tracking platform MarineTraffic. Nonetheless, crude continues to flow through Bab el-Mandeb, albeit at roughly half the volume seen at the start of July, with some tankers—particularly Chinese vessels—receiving permission from the Houthis to pass.

Experts note that while the Damietta attack illustrates the capability of hostile actors to target maritime facilities near the canal, it does not necessarily indicate an imminent threat to the Suez Canal itself. Aly Blakeway, head of Atlantic LNG at S&P Global Energy, observed that the market is not currently pricing in any disruption to canal operations. Meanwhile, Wael Kaddour, a former Suez Canal Authority board member, emphasized the heavy security measures protecting the canal around the clock.

The threat environment has already impacted the shipping industry. Increased risks have prompted some ships to switch off tracking devices, and maritime insurers are expected to raise premiums for vessels transiting the Suez region, with Additional War Risk Premiums likely in response to the heightened threat level. Maritime security companies are reassessing protective measures around Egypt’s Mediterranean ports.

The strategic importance of the Suez Canal and the Sumed pipeline has risen due to reduced shipments through Hormuz and Bab el-Mandeb. While VLCCs (Very Large Crude Carriers) cannot fully transit the canal due to draft constraints, they can offload crude via Sumed for reloading in the Mediterranean. Current throughput at Sidi Kerir port reached 1.4 million barrels per day last week, below Sumed’s capacity of 2.5 million barrels per day but indicative of potential for increased volumes as disruptions persist elsewhere.

Industry analysts warn that any attack disrupting canal operations would have swift and significant consequences on global energy markets. Corey Ranslem, CEO of maritime security firm Dryad Global, said that such an event would sharply increase war risk insurance costs and alter regional security assessments. Matthew Wright, principal freight analyst at Kpler, added that canal disruptions would immediately drive up shipping costs and fuel inflationary pressures for consumers worldwide.

With regional hostilities continuing and Iran threatening to halt Middle East energy exports in response to U.S. sanctions, the safety and reliability of the Suez Canal and Sumed pipeline remain crucial factors in maintaining global oil supply stability.