By Ziad Hamdi
Egypt is facing a severe energy crisis as Israel’s closure of its Leviathan and Karish gas fields, prompted by Iranian missile attacks, has cut off nearly 1 billion cubic feet per day of critical gas imports. The Egyptian Ministry of Petroleum and Mineral Resources has launched an emergency energy plan to manage surging summer demand, suspending gas deliveries to industrial sectors and shifting to low-quality fuels like mazut and diesel to stabilize the power grid, according to Reuters. This disruption, intensified by the shutdown of Israel’s Bazan oil refinery due to missile strike damage, has left Egypt scrambling to secure alternative energy sources.
The industrial impact in Egypt has been swift and severe. Fertilizer producers have halted operations due to feedstock shortages, threatening agricultural and economic stability. To address the shortfall, the government is seeking emergency imports of up to 1 million tonnes of fuel oil starting in August and has issued liquefied natural gas (LNG) tenders. Last week, state-owned Egyptian Natural Gas Holding Co. (EGAS) secured 290 LNG cargoes over the next two and a half years from Saudi Aramco, Shell Plc, Trafigura, and other traders, aiming to restore Egypt’s status as a net LNG exporter amid a deepening domestic supply crunch.
Financially, Egypt is under immense pressure. With foreign reserves already strained, the soaring costs of spot LNG and fuel oil premiums threaten to widen the country’s energy budget deficit. The reliance on expensive imports and low-quality fuels could further strain Egypt’s economy, which is already grappling with high inflation and limited fiscal flexibility. The government’s ability to balance these costs with rising energy demand will be critical to avoiding prolonged disruptions.
The crisis underscores Egypt’s vulnerability to regional geopolitical tensions and its dependence on imported gas. As the Iran-Israel conflict continues to disrupt Middle East energy flows, Egypt’s energy security remains precarious, with potential ripple effects on industrial output and economic growth. The coming months will test Cairo’s ability to navigate this complex challenge while maintaining stability in a region fraught with uncertainty.
