Light in the Darkness How Can Israel-Egypt Energy Relations Be Strengthened?

Key Findings:

This article examines how the 2024 energy crisis in Egypt, marked by widespread power outages and a sharp decline in domestic gas production, has both tested and reinforced the strategic energy ties between Egypt and Israel. Egypt’s energy troubles stem from falling gas output (notably at the Zohr field), increasing electricity demand, high rates of power theft, and mounting debt to foreign gas companies. These challenges forced Egypt to shift from being a liquefied natural gas (LNG) exporter to an importer, placing heavy pressure on its economy and energy independence.

Amid this crisis, Israel emerged as a key gas supplier, accounting for around one-sixth of Egypt’s gas consumption in 2023. Despite regional turmoil following Hamas’s October 7 attack and ongoing war, Israeli gas exports to Egypt continued relatively uninterrupted, even as production at some offshore fields was temporarily halted for security reasons. This continuity in energy trade, which now comprises roughly 86% of total bilateral commerce, demonstrated the resilience and strategic importance of the energy relationship between the two countries.

To build on this cooperation, the article proposes four main policy recommendations. First, Israel should accelerate infrastructure projects to increase gas exports to Egypt, such as new pipelines, which could boost bilateral trade and relieve Egypt’s energy shortages. Second, Israel should support the development of the Gaza Marine gas field, conditional on a post-Hamas governance arrangement, to contribute to both Gaza’s reconstruction and Egypt’s energy needs. Third, the Eastern Mediterranean Gas Forum (EMGF) should be expanded and used as a platform for regional political and security dialogue, especially during crises. Finally, Israel and Egypt should collaborate on renewable energy projects, particularly solar power, leveraging their complementary strengths to reduce reliance on natural gas and attract foreign investment.

Natural gas has proven to be a stable and strategic anchor in Israel-Egypt relations. Strengthening energy cooperation, particularly through gas and renewable ventures, could serve as a pathway to deeper bilateral ties and regional stability, provided that broader political and security conditions allow for sustained collaboration.