Since the outbreak of the confrontation between the United States and Israel on one side and Iran on the other, the global economy has entered a state of anxiety and uncertainty, particularly with rising oil prices driven by threats to close the Strait of Hormuz and Iranian strikes on Gulf energy facilities, alongside continued ambiguity about the war’s objectives and scope.
In this context, Egypt has seen successive increases in gasoline and diesel prices, amounting to three Egyptian pounds per liter. The government then announced a package of measures described as “exceptional” for a one-month period starting March 28 to address the war’s repercussions.
These measures include halting the lighting of roadside advertisements, reducing street lighting to the lowest possible level, and closing shops, malls, restaurants, and cafés at 9 p.m. The government also announced the possibility of implementing remote work one or two days per week in both the public and private sectors to rationalize electricity consumption.
Last week, Egyptian Prime Minister Mostafa Madbouly announced that the country’s gas import bill had risen from $560 million per month to approximately $1.65 billion.
In remarks to Alhurra, engineer Medhat Youssef, former deputy head of the Egyptian General Petroleum Corporation, said that what is currently happening in Egypt’s energy sector is similar to what occurred during the war in Gaza.
Egypt produces about 4 billion cubic feet of natural gas per day, while consumption reaches 6 billion in winter and 7.3 billion cubic feet per day in summer, Youssef said.
He added that Israeli gas imports can reach up to 1.1 billion cubic feet per day at peak levels, but they decline or stop entirely during periods of tension, as happened during the Gaza war and is now recurring amid the escalation with Iran.
Egypt is currently facing a deficit ranging between 2 and 2.2 billion cubic feet per day. This gap is partially covered by regasification plants located in the Gulf of Suez and at Jordan’s Aqaba port, which together supply only about 2 billion cubic feet per day.
Youssef explained that this current balance may not hold for long, especially with the onset of summer, when electricity consumption rises and generation efficiency declines due to heat. This will require continued Israeli gas imports or resorting to more expensive alternatives such as fuel oil, or expanding regasification capacity.
He noted that one of the main advantages of Israeli gas is its lower cost, due to direct pipeline transport, which avoids liquefaction, shipping, and insurance expenses.
Economist Hisham Badawy confirmed that the relatively low price of Israeli gas, along with geographic proximity, were key drivers behind Egypt’s reliance on it. However, he warned that this dependence created a state of “excessive complacency,” noting that the financial savings Egypt achieved during periods of stability have evaporated with the outbreak of geopolitical tensions, as the import bill for the same quantities has surged significantly.
Egypt and Israel signed a new agreement last December to supply gas worth approximately $35 billion, representing a major expansion compared to the 2019 agreement. Under the new deal, supplied volumes will rise to about 130 billion cubic meters through 2040, based on production from the Leviathan field in the eastern Mediterranean. Partial supply is set to begin in 2026 after pipeline expansion is completed. The agreement strengthens Egypt’s position as a key gateway for exporting gas to Europe and global markets.
Badawy added that placing full responsibility for Egypt’s electricity crisis on reliance on Israeli gas is somewhat exaggerated. He pointed out that declining domestic production, coupled with a sharp increase in demand and financial pressures that hinder investment in new exploration, are all major factors exacerbating the crisis.
On the other hand, Israeli Prime Minister Benjamin Netanyahu has proposed creating alternative routes for transporting oil and gas away from the Strait of Hormuz and the Red Sea, through pipelines extending westward across the Arabian Peninsula.
However, oil expert Dr. Mamdouh Salameh dismissed the feasibility of this proposal, stating that transporting around 20 million barrels per day would require massive infrastructure and enormous costs, in addition to significant political complications.
He added that Gulf states agreeing to such a project would effectively mean placing their oil exports under Israeli management, which is unrealistic. He emphasized that the Strait of Hormuz will remain the primary route for global oil exports.
The article is a translation of the original Arabic.
