Egypt and Saudi Arabia are building alternatives to Hormuz

Egypt and Saudi Arabia are quietly building a new logistics corridor to secure the needs of Gulf countries from the international market, amid the security problems and geopolitical tensions induced by the US-Israel war on Iran.

The new corridor utilises Egypt’s Mediterranean and Red Sea ports, connecting them to Saudi Arabia’s Red Sea ports and creating a Strait of Hormuz-proof bridge that helps Gulf nations circumvent the perils associated with navigating the strategic strait.

Hundreds of tonnes of refrigerated and dry cargo have been pouring into the Egyptian Mediterranean Port of Damietta from Europe, especially Italy’s Trieste Port on the Adriatic Sea, for several weeks now.

The same cargo is then transported to the Egyptian Port of Safaga on the Red Sea before being shipped to Gulf markets through Saudi Red Sea ports like Duba.

The new logistics corridor, maritime transport experts say, reduces time and costs and, consequently, affects the overall prices of goods arriving in Gulf markets.

“Apart from price and time considerations, the new corridor provides a good alternative to maritime chokepoints now strained by the war on Iran,” independent Egyptian maritime transport expert Ahmed al-Shami said.

Speaking to The New Arab, he expected Gulf countries to become increasingly dependent on the new logistics corridor for trade with Europe and other regions, especially if Iranian threats to freedom of navigation in the Strait of Hormuz persist in the coming period.

“The increase in dependence over this corridor in the future will, however, make it necessary for Egypt’s Mediterranean and Red Sea ports to be more prepared for the reception of large container ships,” al-Shami added.

The new logistics corridor was propelled by Egypt’s latest launch of a Ro-Ro transit service that aims to create a safe and uninterrupted link between Europe and Gulf markets.

It acquires its importance from the continued closure of the Strait of Hormuz, the risks associated with utilising this strategic waterway to meet the needs of the Gulf Cooperation Council (GCC) countries, and Iran’s desire to impose transit fees on ships navigating the strait, experts said.

Social media war

The Port of Trieste has been acting as Europe’s gateway, with cargo originating across the continent using it to reach international markets.

The new logistics corridor has been tacitly evolving to meet the needs of Gulf countries, as a social media war has been brewing over Egypt’s contribution to their defence against Iranian attacks.

While Egypt has repeatedly denounced these attacks since the beginning of the war in late February, a sizeable number of Gulf intellectuals and influencers have viewed the same position as falling short of what was expected of Egypt, the most populous Arab country with what is considered the most powerful military.

Some Gulf thinkers have gone as far as accusing Egypt of taking Iran’s side in the war, while others have called for re-evaluating ties with the populous North African nation after the war.

A Kuwaiti lawyer has called on her country to reclaim $2 billion in deposits at the Central Bank of Egypt that are due to mature later this month.

Her call was echoed by other influencers from GCC countries, who also called on their governments to withdraw deposits from Egypt.

Anger among ordinary GCC citizens is rooted in the support that ordinary Egyptians have been voicing for Iran throughout the war, Gulf observers say.

Saudi political analyst Omar Saif said Egyptians’ support for Gulf countries is also far less than what is expected, given the close ties between ordinary Egyptians and ordinary Gulf citizens.

“This feeble Egyptian support ignites Gulf anger, mainly demonstrated on social media,” he told TNA.

Nonetheless, Saif expressed hopes that this altercation would not cause rifts in relations between the two sides in the future.

Strategic repositioning

Egypt has been painfully affected by the US-Israel war against Iran at the economic level, even as the war has brought back the spotlight on the importance of Cairo’s mediation role, especially in the presence of open communication channels between Egypt and Iran.

The Egyptian intelligence service has also succeeded in communicating with the Iranian Revolutionary Guard Corps, highlighting its reach at a critical time for the region.

Nevertheless, war-induced surges in oil prices and international trade disruptions are negatively affecting Egyptian consumers.

The same surges and disruptions have triggered a series of Egyptian government actions, with direct implications for ordinary people, including austerity measures such as hiking energy prices by almost 30% and imposing limits on electricity use.

The war has also threatened the prospects of millions of Egyptian migrant workers in GCC countries, who send tens of billions of dollars in remittances to their country each year.

The launch of the new logistics corridor is, however, viewed in Egypt as one of the few gains of the war, allowing Egypt to position itself as a new regional logistics hub.

It complements increased dependence on SUMED, a 320-kilometre pipeline that connects Egypt’s Red Sea coast with its Mediterranean coast, for transporting Gulf oil to the international market.

Egypt has been striving to make itself useful to international trade for several years now, but most of the Arab country’s efforts in this regard have focused on the Suez Canal, the maritime passageway that offers the shortest route between the Mediterranean and the Red Sea.

Nevertheless, recurrent Houthi attacks on commercial shipping in the Red Sea and the Bab al-Mandeb Strait have exposed the vulnerabilities of the canal to bouts of regional outbursts of violence.

The Houthis’ latest jump into the fray of the US-Israel war against Iran is now raising the prospect of the Suez Canal being severely affected.

This, economists say, underscores the importance of the new logistics corridor for maintaining Egypt’s relevance in international trade, especially with GCC countries and the wider world.

Leading Egyptian economist Ali al-Edrissi viewed the launch of the new corridor as an “important step” in Egypt’s bid to strategically reposition itself amid the challenges posed by the Iran war.

“It boosts Egypt’s status as a regional logistics centre, thanks to its ability to reduce the time and consequently the cost of the transport of goods between the Gulf and Europe,” al-Edrissi told TNA.

He revealed that this corridor is only one of six transportation routes planned by Egypt to become an international logistics hub, tapping into its geographic location, security, and political stability.

“These new routes will provide GCC countries with substitutes for Hormuz and Bab al-Mandeb, ones that will function as important gateways for Gulf trade with the outside world,” al-Edrissi said.