How the (closure of the) Suez Canal changed the world

The segment of my January/February container-ship journey I am most anticipating is passing through the Suez Canal.  Here is what Horatio Clare writes about his passage through Suez:

Unfinished wars lie under all our horizons.  The chart on which Chris plotted our approach to the canal shows Egypt, the Sinai, the southern end of Israel an Gaza.  The refinery we saw last night was bombed by the British during the Suez crisis.  During Suez, Port Fouad was the scene of one of the more dubious victories of the French Foreign Legion, which fought its way through the little town, taking no casualties while inflicting many.  The lake we float on now was home to the ‘Yellow Fleet’: a convoy of merchant ships trapped by the closing of the canal in 1967 during the Six Day War.  They remained at anchor, blown over with desert sand, until the canal reopened in 1975, when only two of them were able to leave under their own power.  One of Yellow Fleet, African Glen, was sunk during the battles of the Yom Kippur War in 1973.  The crews trapped on the Great Bitter Lake had a terrifyingly good view of this war: the canal was one of the front lines and the counter-attack which eventually ended the conflict began with Israeli tanks crossing into Egypt at Deversoir, at the northern end of the lake (pp. 82-83).

The Suez Canal was closed twice.  Once when Israel/UK/France attacked Egypt in 1956, and a second time when Israel attacked Egypt and the rest of its neighbours in 1967.

Although the 1956/57 closure (between November 1956 and just before May 1957) was much shorter, its effect was somehow more dramatic.   The British still held much colonial real estate in the region, and controlled the flow of oil from Iran (post-1953 coup), Iraq (pre-1958 revolt), Aden, and of course the Trucial states.  Their regional base had only recently (1954) shifted from the banks of Suez to Cyprus, and their domestic economy was only just recovering from the effects of the Second World War (there was still rationing of food, petrol and various other necessities).  The French had recently had to deal with the independence of Morocco and Tunisia, were embroiled in their pacification of Algerian revolt (which they blamed on Nassser), and had been actively allied with Israel, providing it with the nuclear expertise and materiel that were to form the core of Israel’s nuclear weapons capability.

A great deal very good work has been written about the 1956 war – and its connection to Hungary; the deeper embedding of the Cold War; the entrenchment of Israeli internal apartheid and regional power [despite its brief humiliation by the US]; the transformation of Gaza; the massive transformation of the Middle East; the overthrow of pro-British regimes in Iraq and the rest of the Arab world; the start of the anticolonial movement in Aden; and so on.  I have found a lot less material about the actual echoes of the closing of the canal on the region and in the world.

The closure of the canal was a massive shock to the system to the British and the Europeans.   Everyday consumption patters in Europe began to change.  The New York Times headline of 1 January 1957 says it all: “British Tea Habit Is a Costlier One: Shipping Rates Due to Suez Closure Cited–Sugar and Milk Also Are Going Up; Route Around Africa Costly; Vast Quantity Is Consumed.”  Petrol had to be rationed in the UK.  There was even a spike in emigration from the UK to New Zealand, Australia and Canada, as there were layoffs and factory closures because off shortage in oil (New York Times 7 December 1956).

The oil that had flown from the Persian Gulf via the canal to Europe suddenly had to be rerouted around the Cape of Good Hope.   So did other supplies.  Suddenly Cape Town in South Africa was bustling with meat supplies being routed to the Cape from Rhodesia, in order to feed the masses of sailors now arriving in the port.

The effect of the closure is certainly electrifying.  The US -despite the massive slap on the wrist it gives the UK, France and Israel- nevertheless brings ships out of mothballs to transport coal to the UK.  Suddenly, questions of economies of scale means ship-building investment pours into supertankers -those VLCCs and ULCCs- which are to become the sine qua non of the oil industry.  Discussions about pipelines flare up.  The European states look to extracting West African and North African oil.  Although Levinson’s wonderful book about the birth and life of containers says nothing about the Suez closure of 1956 and focuses primarily on the labour contention around the unloading of ships (which acted as a spur for inventing a mechanism that decreased the need for militant dockside labour), I am sure the efficacy of transport and economies of scale  -that was suddenly made so urgent because of Canal closure- also played a role in the invention of the container ship.

Fast forward a decade.

Israel began the 1967 war on 5 June with aerial assaults on Egyptian airfields. On 6 June, Gamal Abdal-Nasser closed the Suez Canal.  As the New York Times wrote the next day,

For a ship traveling from the Persian Gulf, where many of the Arabian oil ports are, to Britain and Western Europe, the voyage around the southern tip of Africa will take 16 days longer, add 4,800 miles of travel and increase the overall cost of the voyage by as much as $20,000 [approximately equivalent to $142,000 in 2014].

The Times estimated that of the 50 ships passing through the Canal in 1966, half were oil tankers.  Italy and France were most directly affected (as 60 and 39 percent of their oil respectively came through the Canal), while “Britain, which depended on Canal shipping for 60 percent of her oil 10 years ago, now has cut that total to 25 percent, primarily because of new African sources of petroleum.” By the end of July, the cost of purchasing tankers had already increased, and the shipping rates had doubled for some tankers carrying oil, with the “Persian Gulf-to-Britain run… most severely affected”;  further increases were being forecast for the autumn (NY Times 23 July 1967).  There are also indications that Iranian oil began to find itself East Asian customers, particularly in Japan, whose economy was massively taking off.  Incidentally, the opening of container-shipping routes to the US during the Vietnam war (as recounted in the wonderful Levinson book) and this shift of preferential sales of oil to Japan in the late 1960s and 1970s must have had a major impact in the meteoric rise of that country’s economy.

By October, 300,000 Egyptians had been evacuated from the villages and towns near the Canal, with New York Times reporting that “Ismailia, a city of 100,000, where the Suez Canal authorities maintain headquarters, was reported by visitors there this week to be virtually deserted” (22 October 1967).

The closure of the Suez Canal had massive influence on the Indian economy (if the profusion of articles in Economic and Political Weekly is an indication) and was a boon for South Africa.  Innovative modes of oil-swapping became an order of the day: for example, USSR would provide oil to Kuwait and Abu Dhabi’s customers in Western Europe, while the two Arab emirates supplied equivalent amounts of oil to USSR’s customers in East Asia, in lieu of Soviet oil transport via the Canal.

And then there is one Bernard Lewis, writing in Foreign Affairs:

In May 1967, the prospects for a southward expansion of Soviet influence seemed excellent. In Somalia, the Soviets were already strongly entrenched and were encouraging Somali irredentist claims against both Ethiopia and Kenya. In southern Arabia, British rule was coming to an end, and there was no reason to doubt that it would be followed by a regime closely linked with Cairo and thus also with Moscow. With the coast from Hodeida to Aden under their control, the Egyptians would not have needed to trouble themselves with the Yemeni interior. With the Suez Canal and Aden at its disposal, the Soviet Navy would soon have established supremacy in the Red Sea, and the regimes on both shores would have been due for realignment or replacement. The way was open to further penetration in southern and eastern Arabia, and especially in the Gulf, where Iraq was already in the revolutionary camp and Iran could be isolated and threatened at its weakest point.

All this was stopped by the June war.

Read that again: “All this was stopped by the June war.” He goes on to explain:

With the closure of the Canal, Soviet naval activity east of Suez was severely limited; the Egyptians withdrew from the Yemen, and the ripe plum of Aden fell to the ground and was not picked. The Somalis, deeply discouraged by the Soviet failure to help the Arabs, decided that irredentism with Soviet support was unsafe, and, since war was not practicable, they proceeded with unusual logic to make peace. In the Gulf, in Arabia and in North Africa, the conservative forces rallied, and the Arab monarchy were even able to impose a halt in subversion on an Egyptian Government that was now financially dependent on them.

If 1967 was significant it wasn’t because of the usual canard peddled by the likes of Fouad Ajami about the growing revulsion of Arabs towards Arab nationalism – it was because the closure of the Canal and 1967 more broadly marked the pivotal moment during which the counterrevolutionary and reactionary forces that so often served (and were protected by) the imperial powers got the upper hand.

It took some 8 years, the War of Attrition, and the 1973 War, plus an intensive dredging operation before Suez was opened on 5 June 1975.  If you go to page 67 of this issue of Popular Mechanics, the story of the dredging and clearing of the Canal is beautifully presented with loads of useful photographs and illustrations (also see The National Geographic on the same subject).

There is also a rather sweet side story which is just begging a documentary film (there is a good radio documentary on the subject which is sadly not available online).  Some 15 ships were crossing through Suez when the 1967 War started and the Canal was closed.  One of the ships, MS Observer, was trapped in Lake Timsah (love the name of the lake), while another 14 ships were trapped in the Great Bitter Lake (also love the name of this lake).  The sailors trapped on the 14 ships formed the “Great Bitter Lake Association” for mutual aid and support.  The GBLA even issued its own stamps (which it seems some kind-hearted souls in the Egyptian post office had even acknowledged as proper postage, allowing postcards and letters marked with the DIY stamp to go through to their destinations).  The sailors remained onboard their ships for a couple of years, but by 1970, most countries decided to abandon the ships, and the fleet, blown over by the Sinai sand became known as the Yellow Fleet.  When the work of clearing the Canal began in 1974, and once the Canal was made safe from scuttled ships and mines, only two of the Yellow Fleet could sail the Canal under their own steam, both of them German ships which arrived in Hamburg to great fanfare.

The opening of the Canal, coming as it did on the heels of the 1973 cartelisation of oil production by OPEC- was a kind of foreshadowing of Camp David and really the death knell of the era of decolonisation – at least in the Arab world.

Suez now allows both supertankers and very large container ships, and at the time of the Arab uprisings of 2011, around 1.8 million barrels per day of crude was transported through Suez.  Fears of closure of the Canal was part of the reason given by the Mubarak security forces for extra harsh crackdowns in the city of Suez, and the popular anger there -resulting in the burning down of most police stations there- was itself a response to regime brutality.  Much of the business news of the uprisings around that time voiced anxieties about the closing of Suez, and its effect as a chokehold on oil transport.

But in throes of a delusion of grandeur and fantasies of Nasseresque myth-making, Egypt’s Abdal Fattah Sisi has his own Suez plans, a kind of $4 billion works project of digging a new canal that will provide employment, while giving the Egyptian military (likely to be in charge in some way of construction) yet further capacity to consolidate.  As to whether this military-infrastructural Keynesian project will come off is still open to speculation,  but what will a second Canal mean for the complex palimpsest of relations -oil extraction, trade, infrastructure construction, insurance, and finance- and networks of geopolitics it will inevitably entail?

Update: The Guardian reports that 1500 Egyptian houses have been demolished without payment for the new Suez project.

This entry was posted in infrastructure, Middle East, militaries, political economy, ports, shipping conditions, ships, transport, war. Bookmark the permalink.

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