On 26 July 1956, Egyptian President Gamal Abdel Nasser announced in a speech in Alexandria that Egypt was nationalizing the Universal Company of the Suez Maritime Canal, the Paris-based joint-stock firm that had operated the canal since its opening in 1869. The decree placed the waterway and its revenues under Egyptian state administration and pledged compensation to shareholders at the closing share price on the Paris bourse.
The move came days after the United States and the United Kingdom withdrew their offers to finance the Aswan High Dam, a decision linked to Egypt's arms deal with Czechoslovakia and its recognition of the People's Republic of China. Nasser framed nationalization as both a means of funding the dam from canal tolls and an act of anti-colonial sovereignty, invoking the principle that the canal sat entirely on Egyptian territory.
The United Kingdom and France, the two largest shareholders, treated the seizure as a strategic threat to oil shipments and to their remaining imperial influence. After the failure of the London Conferences of August and September 1956 and the proposed Suez Canal Users' Association, Britain, France, and Israel agreed at Sèvres in late October to a coordinated military operation. Israel invaded the Sinai on 29 October; Anglo-French forces bombed Egyptian airfields and landed at Port Said in early November.
Heavy pressure from the United States (including a run on sterling), the Soviet Union, and a UN General Assembly resolution under the Uniting for Peace procedure forced a ceasefire and withdrawal. The first United Nations Emergency Force (UNEF I) was deployed to supervise the pullout.
The episode is widely treated in IR scholarship as a hinge moment: it confirmed the decline of British and French great-power status, elevated Nasser as a leader of Arab nationalism and the Non-Aligned Movement, and demonstrated US-Soviet capacity to override traditional European powers. Egyptian control of the canal has continued uninterrupted since, today exercised through the Suez Canal Authority established in 1956.
Example
In July 1956, Gamal Abdel Nasser nationalized the Suez Canal Company, prompting the joint Anglo-French-Israeli military intervention known as the Suez Crisis later that year.
Frequently asked questions
He cited Egyptian sovereignty over a waterway on its territory and the need to fund the Aswan High Dam after the US and UK withdrew financing offers in July 1956.
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