In one of the scariest moments in modern history, we're doing our best at ScheerPost to pierce the fog of lies that conceal it but we need some help to pay our writers and staff. Please consider a tax-deductible donation.
By The Cradle’s Egypt Correspondent
Over the past decade, Egypt’s natural gas sector has shifted from a symbol of self-sufficiency and export ambition to a glaring indictment of the country’s fragile energy governance – and of the increasingly tangled web of politics and economics in the eastern Mediterranean.
The latest Leviathan gas agreement with Israel – expanded even as bombs fall on Gaza – is not just another commercial transaction. It is the latest chapter in a decades-long trajectory that began over 30 years ago, intensified with the discovery of the Zohr field, and now exposes the perils of relying on major gas finds without meaningful structural reform.
The myth of energy independence
Since the 1979 Camp David Accords, energy cooperation between Cairo and Tel Aviv has taken many forms. But a new era began in the early 2000s, when Egypt started exporting gas to Israel through the Arab Gas Pipeline.
At the time, Egypt was a net gas exporter, backed by substantial reserves in the Nile Delta and Mediterranean, with domestic demand well below production capacity. This advantage, however, steadily eroded under the weight of a fast-growing population, expanding industrial base, and near-total dependence on gas for electricity generation – without any serious investment in energy efficiency or pricing reform.
Energy policy in Egypt has long been shaped by political imperatives rather than strategic planning. Cheap domestic gas prices were politically popular, but encouraged wasteful consumption and discouraged private investment in alternative energy or exploration. Successive governments treated the sector as a source of quick fiscal relief or foreign exchange rather than a long-term national priority.
By 2015, Egypt had entered a full-scale gas shortfall and was importing liquefied natural gas (LNG) at premium prices amid a deepening electricity crisis. That August, the discovery of the Zohr field offered a lifeline.
Zohr’s promise and its limits
Estimated at 30 trillion cubic feet (around 850 billion cubic meters), Zohr was rapidly brought online. Production began in late 2017 and peaked at 3.2 billion cubic feet per day by 2019. The boost was enough to briefly restore self-sufficiency, halt LNG imports, and revive the Idku and Damietta liquefaction plants, which together process around 12 million tons annually.
The Zohr discovery was celebrated as a turning point not just in Egypt, but across the eastern Mediterranean, where competing pipeline proposals and energy corridors had become entangled with geopolitical rivalries – from Greece and Turkiye to Cyprus, Lebanon, and Israel. Egypt, with its strategic location and LNG infrastructure, seemed poised to emerge as a central player. But the reality proved more brittle.
Egypt’s gas production peaked in 2021 at around 6.1 billion cubic feet per day before beginning a steady decline. By 2024–2025, output had fallen to roughly 5 billion – or less in some periods – while domestic consumption exceeded 6.2 billion, largely due to power and industrial demand.
This seemingly narrow gap returned Egypt to the ranks of net importers. Zohr’s decline, while predictable for a deepwater field, was more foreseeable than officials let on.
Speaking at the 27th Ministerial Meeting of the Gas Exporting Countries Forum (GECF) in October, Karim Badawi, Egypt’s minister of petroleum and mineral resources, said that the Zohr gas field currently contributes around 23 percent of the country’s total natural gas production.
Zohr’s decline was not due to geological failure, but rather to an aggressive, front-loaded extraction model and insufficient follow-up investment to offset depletion through new wells or equivalent-sized discoveries. Without another mega-field and given the high costs of deepwater exploration in Egyptian waters, imported gas became an almost inevitable fix – especially during peak summer and winter seasons.
Compounding the problem, Egypt’s economic crisis – characterized by inflation, currency devaluation, and mounting debt – limited the government’s capacity to reinvest in domestic energy infrastructure.
The Leviathan deal and strategic dependence
In this context, Egypt resumed LNG imports. Between July 2025 and June 2026, Cairo planned to bring in between 150 and 160 shipments, according to official estimates, to meet domestic demand. But with LNG prices at times exceeding $13 per million British thermal units (MMBtu), the burden on Egypt’s balance of payments was severe. Israeli gas, piped in from Leviathan and Tamar, appeared the cheaper fix – costing around $7–8 per MMBtu.
The current gas deal, worth $35 billion and running until 2040, commits Egypt to importing nearly 130 billion cubic meters from Israel. Leviathan alone holds an estimated 600 billion cubic meters in reserves.
Israeli gas now makes up 15–20 percent of Egypt’s consumption, with monthly imports reaching 0.9 billion cubic meters at times. Some of this is re-exported to Europe through Egypt’s LNG terminals, reinforcing Cairo’s narrative as a regional gas hub. But that narrative masks a deeper truth, which is that Egypt is no longer a dominant producer, but a transit state increasingly reliant on its former client.
This shift also reflects broader regional realignments. Tel Aviv has positioned itself as an energy supplier to Europe, especially after the war in Ukraine disrupted Russian gas flows. With Washington’s blessing, Israeli gas flowing through Egypt to European markets serves not only economic ends but also a strategic one: embedding Israel deeper into regional and transatlantic energy supply chains.
War, optics, and energy as leverage
Israel’s genocidal war on Gaza has thrown this dependency into stark relief. For Tel Aviv, uninterrupted energy exports are now a political weapon. Israeli officials boast that gas flows to Egypt and Jordan continue despite the war, showcasing the durability of their infrastructure and regional ties. It is a domestic and international message that Israel remains economically integrated even as it wages war.
For Egypt, the optics are far more fraught. The need for Israeli gas is real – it keeps the lights on. But the political cost is high. At home, the deal is seen by many as economic normalization with a state executing a brutal war on Palestinians. The government has tried to separate its support for Palestine from what it calls “economic necessities,” but this balancing act has failed to placate public anger.
In Washington and Brussels, the uninterrupted gas flow is celebrated as a stabilizing factor in volatile energy markets. But what is framed as “stability” is, in reality, politically volatile. Many critics argue that turning gas into a tool for wartime regional alignment entrenches crisis management over genuine resolution – and subordinates moral considerations to energy market priorities.
In the end, Egypt’s return to gas imports – despite the fanfare around Zohr – reveals more than the decline of a single field. It is the result of a model that favored quick wins over long-term strategy, soaring consumption over structural reform, and weaponized energy narratives over serious sectoral overhaul.
As gas becomes more entangled in war and politics, it no longer belongs to the technical realm alone. Today, more than ever, gas has become another language of conflict.
Editor’s Note: At a moment when the once vaunted model of responsible journalism is overwhelmingly the play thing of self-serving billionaires and their corporate scribes, alternatives of integrity are desperately needed, and ScheerPost is one of them. Please support our independent journalism by contributing to our online donation platform, Network for Good, or send a check to our new PO Box. We can’t thank you enough, and promise to keep bringing you this kind of vital news.
You can also make a donation to our PayPal or subscribe to our Patreon.