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Explained: Suez Canal’s bumpy history, and impact on global trade

The Suez Canal has existed in one form or the other since construction started under the reign of Senausret III, Pharao of Egypt (1887-1849 BC).

Written by Nandni Mahajan , Edited by Explained Desk | New Delhi |
Updated: April 3, 2021 10:33:19 am
A boat navigates in front of a cargo ship, Ever Green, after it become wedged across Egypt’s Suez Canal and blocked all traffic in the vital waterway. (AP)

Global trade has been impacted after a container ship got stuck in the Suez Canal, the 193-km waterway that is pivotal in connecting Europe and Asia. Located in Egypt, the artificial sea-level waterway was built between 1859 and 1869 linking the Mediterranean Sea and the Red Sea. As the shortest route between the Atlantic Ocean and lands around the Indian and western Pacific Oceans, the canal is one of the busiest waterways in the world, negating the need to navigate around the Cape of Good Hope in Africa and thus cutting distances by up to 7,000 km.

But the canal has had anything but smooth sailing in the 150 or more years since it was formally built. In fact, political, financial and technical problems have resulted in the canal shutting down five times, the last closure lasting eight years before reopening for navigation in June 1975.

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Suez Canal’s Long History

The canal has existed in one form or the other since construction started under the reign of Senausret III, Pharao of Egypt (1887-1849 BC). Many kings who ruled later kept improving and expanding this canal. Construction picked up pace around 300 years back as maritime trade between Europe and Asia became crucial for many economies.

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In 1799, Napoleon’s efforts to build a proper canal were brought to an end due to an inaccuracy in the measurements. In the mid-1800s, French diplomat and engineer Ferdinand de Lesseps convinced the Egyptian viceroy Said Pasha to support the canal’s construction.

In 1858, the Universal Suez Ship Canal Company was tasked to construct and operate the canal for 99 years, after which rights would be handed to the Egyptian government. Despite facing multiple problems ranging from financial difficulties and attempts by the British and Turks to halt construction, the canal was opened for international navigation in 1869.

The French and British held most of the shares in the canal company. The British used their position to sustain their maritime and colonial interests by maintaining a defensive force along the Suez Canal Zone as part of a 1936 treaty. In 1954, facing pressure from Egyptian nationalists, the two countries signed a seven-year treaty that led to the withdrawal of British troops.


Egypt takes over Suez Canal

In 1956, Egyptian President Abdel Nasser nationalised the Suez Canal to pay for the construction of a dam on the Nile. This led to the Suez Crisis with UK, France and Israel mounting an attack on Egypt. The conflict ended in 1957 after the United Nations got involved and was followed by the first instance of the UN Peacekeeping Forces being deployed anywhere in the world. Even as the occupying forces withdrew their troops, the UN forced were stationed at Sinai to maintain peace between Egypt and Israel.

In 1967, Nasser ordered the peacekeeping forces out of Sinai leading to a new conflict between the two countries. Israelis occupied Sinai and in response, Egypt closed the canal to all shipping. The closure lasted until 1975, when the two countries signed a disengagement accord. The canal was the focal point of the Arab-Israeli War of 1973, with the Arab coalition led by Egypt and Syria.

A view of the Suez Canal from the International Space Station. (Wikimedia Commons)

An Economic Lifeline

The canal continues to be the lifeline for all trade between the West and East as 10 per cent of the global trade passes through it every year. The average 50 ships that pass through it daily carry about $9.5 billion worth of goods, every day. The freight and cargo include everything from crude oil to perishables.

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Impact of Suez Canal blockade

On March 23, due to weather obstructions a giant container ship, MV Ever Given, en route from China to the Netherlands ended up getting stuck in one of the canal’s narrow stretches, thus blocking all traffic. Over 200 ships are stuck on both sides of the canal putting stress on global supply chains. The long-term impacts of this block will depend on how long it lasts, but some countries have already seen a rise in oil prices after the blockage.

The incident also raises questions about finding solutions to prevent future accidents and reducing the global dependence on this narrow waterway.

Nandini Mahajan is an intern with

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First published on: 26-03-2021 at 09:39:59 pm
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