Egypt’s August extension of its natural-gas import agreement with Israel was followed by escalating rhetoric on both sides and Israeli threats to derail the deal. However, pragmatism underlies the agreement’s survival.
Egypt signed a US$35 billion agreement with Israel to extend and expand natural-gas imports from Israel’s Leviathan field, offering critical relief to Egypt’s growing energy deficit. In early September, Israeli Prime Minister Benjamin Netanyahu threatened to derail the deal as the two states traded accusations of Camp David Accords violations. Cairo’s political rhetoric towards Israel escalated as the latter carried out airstrikes targeting Hamas leadership in Qatar and blazed Gaza City, with Egyptian President Abdel Fattah al-Sisi naming Israel the ‘enemy’ of the region and sending tanks to the Sinai to deter displacement of Gazans south of the strip. While these developments highlighted how the export of critical gas to Israel’s most important Arab partner is fraught with political vulnerabilities, pragmatism on both sides underlies the deal’s survival.
Egypt’s dilemma
With stagnating gas fields and soaring domestic demand, Egypt is overwhelmingly dependent on imports for its domestic energy supply. It is expected to spend upwards of US$20bn importing liquefied natural gas (LNG) and petroleum products in 2025. Roughly 60% of Egypt’s overall gas imports come from Israel, and it is therefore highly vulnerable to Israeli gas flow, having experienced deadly blackouts in 2024 partially due to the Leviathan shutdown during Iran–Israel escalations, as well as scheduled maintenance. To ease domestic unrest, Egypt was forced to accept the high prices of the LNG spot market, with Saudi Arabia and Libya stepping in to finance cargoes.
Cairo’s deep gas and security ties with Israel risk inflaming historic, civic Palestinian solidarity in Egypt and undermining domestic political stability. Palestinian activism networks had lent their structure to the Arab Spring mobilisation in 2011, and protesters saw through Sisi’s attempts to foster a public mandate for his approach to Gaza in the lead-up to the 2023 elections. Instead, they marched to Tahrir Square and called out the government’s hypocrisy as the proportion of Egypt’s gas imports from Israel grew.
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