SOCIAL POST: $35 Billion Israel-Egypt Gas Deal, Another Trap for Egypt?
Israeli energy sites have already been targeted by Iran and remain exposed, putting future supply at risk.
The $35 billion Israel–Egypt gas agreement marks a major development in the Eastern Mediterranean. It reflects Egypt’s declining energy autonomy and growing uncertainty around Israel’s role as a supplier.
Leviathan, Israel’s largest gas field, has become central to its energy strategy. Since production began in 2020, Israel has begun supplying Jordan and Egypt, using gas exports to build dependency. Plus, Egypt’s domestic gas production has fallen by over 42% since 2021. Once an exporter via Idku and Damietta, Egypt now imports pipeline gas from fields it once viewed as competitors.
Pipeline gas from Israel is cheaper than LNG and could save Egypt billions. However, Israeli energy sites have already been targeted by Iran and remain exposed, putting future supply at risk. Moreover, the reliance on Israeli gas signals deeper structural issues within Egypt’s energy policy. High debt levels, a deteriorating macroeconomic environment, and limited investment have left Egypt with few alternatives. There are security risks.
During the Israel–Iran war, exports from Leviathan were halted for 12 days. Any renewed tensions could affect supply to Egypt, esp as new infrastructure increases the risk footprint. The agreement affects global LNG dynamics.
If Egypt reduces LNG imports by up to 12 bcm annually by 2029, global buyers in Europe & Asia may find some relief in an otherwise competitive market. The deal is structured in 2 phases. Phase 1 begins in 2026 using existing infrastructure. Phase Two, from around 2029, requires a $2.4bn expansion of Leviathan and new pipeline capacity through Nitzana.
Long-term concerns: Egypt enters a binding arrangement lasting to 2040, the financing introduces external dependencies, & domestic issues around cooperation with Israel remain unresolved. Israel's role as a regional energy supplier may strengthen, but repeated attacks by Iran expose ongoing vulnerabilities. This limits its energy influence stability. Egypt's short-term relief has long-term risks. The East Med’s energy landscape remains fragile.