Developments in the Middle East are casting heavy shadows over Egypt’s energy market, at a time when Cairo is seeking to achieve a degree of relative stability after mounting economic pressures—most notably disruptions in Suez Canal revenues and escalating threats in the Strait of Hormuz.
In this context, Bloomberg News reported on Sunday that Egypt is moving to import at least one million barrels per month of Libyan crude oil, in a step aimed at compensating for the halt in oil supplies from Kuwait. This follows the Kuwait Petroleum Corporation’s declaration of “force majeure” on crude sales—meaning the suspension of contractual obligations due to exceptional circumstances beyond control that make fulfillment impossible.
Egypt had been importing between one and two million barrels per month of Kuwaiti oil, in addition to about one million barrels from Saudi Aramco, under credit facilities that have helped support the stability of the domestic energy market in recent years.
On the sidelines of the Libya Energy and Economy Summit, held in Tripoli on January 24, Egypt and Libya signed a memorandum of understanding for cooperation in the fields of petroleum, natural gas, and mining. The signing was attended by Libyan Prime Minister Abdul Hamid Dbeibeh, Egyptian Minister of Petroleum Karim Badawi, and Libyan Minister of Oil and Gas Khalifa Abdel Sadiq.
The memorandum aims to launch a new phase of cooperation between the two countries in the petroleum sector, covering exploration and research, oil refining, refinery development, as well as studying the transportation of crude oil and natural gas between the two countries.
Jamal Al-Qalyoubi, a professor of petroleum and energy, said that “the coming period may witness additional challenges related to the Strait of Hormuz, along with potential tensions in the Bab al-Mandab region, which has necessitated the search for quick and secure solutions away from conflict zones.” He explained that the agreement between Egypt and Libya includes importing crude via tankers from the port of Sirte.
Al-Qalyoubi also noted, in remarks to Alhurra, the possibility of expanding requests for additional quantities of crude oil within the framework of this cooperation.
He added that the instability previously witnessed in Libya affected its economic relations with several countries, and that “Egypt enjoys flexibility in dealing with various parties, making these agreements a positive factor that supports its economic and strategic interests.”
As part of its plan to secure domestic market needs, the Egyptian government is seeking to import between 3.5 million and 4 million barrels of oil monthly from Arab countries and European markets.
Estimates indicate that more than 3 million barrels of crude oil will be supplied through Arab countries connected to Egypt via the SUMED pipeline, in addition to other shipments delivered directly to Egyptian ports.
In this context, the acceleration of implementing the agreement with Libya comes as Libya joins the list of countries that the Egyptian General Petroleum Corporation aims to contract with during the second quarter of the current year. The goal is to bridge the gap in local refining capacity and provide the petroleum products required for various sectors, which are expected to represent about 20% of total market needs.
Egypt’s crude oil production stands at around 500,000 barrels per day, while refineries operate at rates ranging between 620,000 and 650,000 barrels per day, reflecting a relative gap between production and consumption.
Medhat Youssef, former vice chairman of the Petroleum Authority, said that Libyan oil is of the light waxy type, which partially resembles Egypt’s Western Desert crude. However, it requires heating during storage and handling, which explains why it was not previously imported. He told Alhurra that this type is not suitable for refining in Egyptian refineries unless blended with other appropriate crudes, noting that the conclusion of this agreement represents the first actual supplies of this type to the Egyptian market.
In a related context, Egyptian President Abdel Fattah el-Sisi warned, during the ninth edition of the Egypt International Energy Conference and Exhibition “EGYPES 2026,” that the continuation of war in Iran could lead to a broad shock in oil supplies, potentially pushing prices to unprecedented levels. He explained that the world is facing two simultaneous shocks: the first is a shortage of energy supply, and the second is a sharp rise in prices, noting that oil reaching $200 per barrel remains a possible scenario given the current developments.
For his part, Libyan economic expert Ali Al-Solh told Alhurra that this step represents a practical model of economic diplomacy, whereby Egypt is leveraging its energy needs to enhance its political influence and reinforce stability in Libya. He explained that Cairo’s reliance on Libyan oil creates cross-border shared interests, making the stability of production and export in Libya directly linked to Egyptian national security.
Meanwhile, energy researcher Yasser Hilal sees Egypt’s current situation as an emergency case tied to fears of supply disruption, particularly amid ongoing debate over the Strait of Hormuz. He stressed that talk of closing the strait may be exaggerated and is more related to security factors and rising shipping costs.
He explained that “Egypt partially relies on supplies from Saudi Aramco, with the possibility of increasing them through the port of Yanbu, in addition to imports from Kuwait under facilitation agreements.” He added that importing Libyan oil is not merely a temporary solution but a strategic step to strengthen regional relations, alongside the importance of expanding Egypt’s role in resolving the Libyan crisis and proposing future projects, including pipelines.
Amid geopolitical pressures and technical challenges, Egypt’s westward move appears to be a strategic option aimed at securing its energy needs and reducing dependence on conflict-prone regions.
