The military escalation between Iran and the Israeli occupation state, which broke out at dawn on Friday following Tel Aviv’s attack on nuclear and military sites inside Iran that killed a number of military commanders, and to which Tehran responded with Operation “True Promise 3”, which included the launch of hundreds of ballistic missiles at Israel, resulting in deaths, injuries and extensive destruction in Tel Aviv, has cast its shadow directly over Egypt’s natural gas supplies.
Since 2020, Cairo has relied on importing about 800 million cubic feet of gas per day from Israel, and on Friday the Israeli supplier companies informed the Egyptian side that pumping would be reduced as a result of the closure of the offshore “Leviathan” field.
In response, the Ministry of Petroleum and Mineral Resources announced the activation of the previously prepared emergency plan, which includes halting gas supplies to some industrial activities and increasing power stations’ consumption of fuel oil to its maximum capacity, while running a number of stations on diesel, in an attempt to maintain the stability of the gas network and prevent electricity load-shedding.
The ministry’s statement added that the gas operations room is monitoring the situation around the clock, stressing that the three regasification ships have already arrived in Egypt, one of which has begun pumping gas into the national grid, while work on preparing and connecting the other two ships to the ports is being completed. According to the statement, the situation of the gas network is currently safe, as is the fuel oil reserve.
According to media outlets, Egypt on Saturday halted the pumping of fuel oil and diesel to factories that use it as fuel in industries such as food and cement for 14 days, with the aim of saving about 8,000 tonnes of fuel oil per day to meet the needs of power stations until imported shipments are secured. This came shortly after the return of a number of fertiliser and petrochemical factories to gradual activity, after they had announced a complete halt to production on 15 May, led by the companies “Alexandria Fertilizers”, “KIMA” in Aswan and “Helwan Fertilizers”, as a result of the sudden reduction in natural gas supplies, while the companies “Abu Qir Fertilizers” and “MOPCO” resorted to operating a single production line, which led to a 30% decline in their production. However, the factories resumed their activity after the Ministry of Petroleum announced a partial pumping of gas at a rate ranging between 60% and 70% of the usual quantities.
Despite the crisis, Egypt began pumping natural gas to the Kingdom of Jordan at a rate of 100 million cubic feet per day to operate power stations, after the interruption of gas supplies coming from Israel in the wake of the outbreak of the war. Egypt had signed an agreement with Jordan in December 2024 to make use of Egyptian infrastructure of floating storage and regasification units to secure the kingdom’s liquefied natural gas needs over the next two years.
Expectations of higher gas prices
In the view of Hassan Nasr, head of the General Division of Petroleum Products at the Federation of Egyptian Chambers of Commerce, raising natural gas prices for factories is something that has been expected for some time, since global prices of natural gas and oil have risen under the influence of the ongoing wars. At a time when Egypt imports natural gas from Israel, the latter is trying to exert pressure on Egypt over the gas issue: it halted exports for 20 or 30 days on the pretext of maintenance on its side, then came back to say it wanted to raise gas prices, before informing Egypt of a reduction in its gas supplies after the outbreak of military operations between it and Iran. He points out that Egypt imports the gas coming from Israel because it is more economical for it in terms of the proximity of supply lines, the existence of natural gas pipelines already in place between Egypt and Israel, and the existence of a signed agreement in this regard, while the shipments that come to Egypt from abroad are very expensive, at astronomical prices.
He tells Zawia3: “It is natural for the price of gas to rise, and everything will rise accordingly, and this will ultimately affect the consumer. There were negotiations taking place with Qatar on exporting gas to Egypt, but Qatar has not yet given a sufficient response. More than one delegation went, they met, talked and arranged matters, but there is no implementation so far. The biggest problem now is that the very large field shared between Qatar and Iran has been bombed and caught fire in the war between Israel and Iran, and this is one of the very huge fields; therefore, this will affect gas supplies everywhere to a very great extent.”
He adds: “Gas prices rose independently of the prices of other petroleum products, by about USD 4 or 5 per unit, before gas prices rose again as a result of the war, by 9%, and oil prices rose by 10%, and the increase in gas prices may reach 12%. All supplies worldwide will be affected by what is happening in this region, because it is a main source that produces more than 50% of the world’s gas and oil output. We are now in summer, and summer means higher electricity consumption; electricity needs gas, gas needs money, money needs dollars, and the dollar exchange rate here will be affected. I think the new gas pricing will appear in October, as part of the increase that had been decided in advance, before the war began.”
The head of the division reveals that the shutdown of the Israeli gas field “Leviathan” had a major impact on Egypt and its supplies; as a result, the state halted gas supplies to some factories. He confirms that Egypt paid about USD 6 billion to buy the gas and fuel needed to operate power stations, to avoid having to resort to load-shedding in summer, and that it currently has sufficient gas, based on shipments it has already contracted at the gas prices that prevailed in the past period, which saved Egypt a cost estimated at about half a billion dollars, representing the price difference after the war. He explains that a ship is currently in the Red Sea, in the Sharm El-Sheikh area, unloading gas, and that the state has stored gas needs sufficient for a period.
Global natural gas prices in Europe rose during Friday’s trading, as Dutch gas futures (the European benchmark) for July delivery climbed by 2.85% to EUR 37.20 (USD 42.93) per megawatt-hour, and JP Morgan bank expects the price of a barrel of oil to reach USD 120 as a result of the military conflict.
“Bloomberg” had reported in a report a week earlier that the Egyptian government is studying raising natural gas prices for factories, and that the proposed increase is estimated at about USD 1 per million British thermal units, starting from next July. According to Al Arabiya channel, the Egyptian government is studying ending gas subsidies for the industrial sector within 3 years.
Factories in Egypt obtain natural gas at varying prices according to the nature of the industrial activity: for the nitrogen fertiliser industry the price is set at no less than USD 4.5 per million British thermal units, and at USD 5.75 for the non-nitrogen fertiliser and iron and steel industries; cement factories obtain it at USD 12, it is set at USD 4.75 for various other industrial activities and USD 4 for power generation stations, while the price for brick kilns stands at EGP 210.
A return to electricity load-shedding
Meanwhile, Dr Hossam Arafat, professor of petroleum engineering and former head of the General Division of Petroleum Products, links the geopolitical, international and media repercussions of the military escalation between Israel and Iran with the increase in global natural gas prices, which is expected to reach 12%. He explains that the region containing the oil and gas sources in Iran, Qatar and the Arabian Gulf is fraught with risks, so the Egyptian Ministry of Petroleum resorted to taking precautionary measures against what may happen, and he expects a schedule of electricity load-shedding to be applied very soon.
He tells Zawia3: “Although we have received the third regasification ship, prepared everything and are waiting for the fourth, one cannot guarantee what supplies will look like. Therefore, we are working and moving in all directions, and preparing our infrastructure represented by the available ships, in addition to current and future contracts, including the 60 shipments Egypt requested for the summer, to which another 30 shipments are expected to be added. Egypt agreed on 160 shipments distributed over three years, and this represents future security and long-term agreements to secure its needs, but what is actually certain is that there are 60 incoming shipments, which began arriving in the first week of June and will continue until September, and which can be increased by 30 additional shipments if maximum use is reached, in addition to diesel and fuel oil.”
The professor of petroleum engineering points out that if the war worsens, the gas coming from Israel, or from Aramco in Saudi Arabia, and from Qatar may be cut off. He explains that supplies from Israel through the shared pipeline make up about 24% of Egypt’s gas needs, equivalent to 800 million cubic feet per day, and this pipeline has stopped, as happened on 14 October 2023 after the events in Gaza. He considers what was stated in the Ministry of Petroleum’s statement a precautionary measure to alert citizens to the need to rationalise consumption, so that the government does not resort to load-shedding, though he believes it will resort to it nonetheless.
He adds: “Regasification is carried out through the three existing ships, the latest of which arrived at Ain Sokhna on Friday and was connected to the national grid, but these ships need liquefied gas to convert. So where is the gas in the first place? The only source that did not need regasification ships was the gas coming from Israel, because it flows directly through pipelines, whereas what we import from abroad by ship is what needs the regasification process, and this is done through two ships that are already in place, and the third was connected yesterday.”
The expert explains that when gas enters Egypt and becomes part of the national grid, whether from local production or imported, it is directed to three main axes. The first is for general use by citizens, whether in homes or cars, and this line cannot be touched; it also includes power generation stations, bearing in mind that these stations can run on dual fuel, gas or fuel oil, meaning they have alternatives. As for the industries targeted by the reduction or halting of gas supplies, they are the fertiliser industry, because it is based primarily on natural gas, followed by energy-intensive industries such as iron, cement and ceramics. The quantities supplied to these factories may be reduced in a way that may not allow them to work three shifts, for example, so they are forced to work two shifts or only one.
Arafat considers that the statement serves as a warning of the repercussions that may occur, which may take the form of price increases, because supply will fall short of demand, and in summer demand rises, in addition to a reduction in gas supplies to fertiliser and petrochemical factories by a rate that may reach 30% or 40%, because priority will be given to using gas for lighting homes and running cars. He points out that the reduction in power stations’ gas consumption will be offset by increased use of fuel oil, and both are bought in hard currency, but fuel oil is relatively easier to obtain.
The government had recently restructured the prices of natural gas used in homes, and applied the new increase in household natural gas prices starting from the bill for the current month of June 2025, with an increase of 33.3% for the consumption bracket from 0 to 30 cubic metres, 25% for the bracket from 31 to 60 cubic metres, and an increase of 40% for the consumption bracket exceeding 60 cubic metres of natural gas. This increase is the second in less than a year, after gas prices were raised in September 2024, and it coincided with the rise in fuel and butane cylinder prices in April.
The halt in supplies is temporary and precautionary
While the Reuters news agency reported, citing sources it did not name, that Egyptian fertiliser companies were forced to halt their operations on Friday 13 June as a result of the decline in Egypt’s natural gas imports from Israel, engineer Islam Warda, representative of Abu Zaabal Fertilizers Company, reveals to “Zawia3” that work at the “Abu Zaabal” fertiliser plant is still proceeding normally, that natural gas supplies to the plant have not stopped, and that its management has not yet received any official instructions related to the emergency plan announced by the Ministry of Petroleum. He points out that the Ministry of Petroleum’s reduction of natural gas supplies to fertiliser factories in June last year did not negatively affect its production, since the reduction took place during a period when the plant was cutting production and not during the peak season; the period from September to January is considered the peak of fertiliser factories’ production in Egypt, because it is linked to the agricultural season. He explains that the plant was not subjected to a complete gas cut for 24 hours.
The Ministry of Petroleum and Mineral Resources had reduced, in June 2024, natural gas supplies to fertiliser companies by between 20% and 30%, and work stopped at some fertiliser factories until the necessary quantities of gas were secured. The reduction came a few weeks after the Egyptian Natural Gas Holding Company (EGAS) halted gas supply to petrochemical companies’ factories, a halt that lasted 11 days, according to press reports, before the ministry announced the gradual resumption of operation and pumping of natural gas supplies to fertiliser factories as of 6 June 2024. The outage prompted the companies Abu Qir Fertilizers, Sidi Kerir and KIMA, at the time, to announce that their factories had stopped working until pressures in the regional gas distribution networks stabilised.
For his part, Khaled Abu El-Makarem, head of the Export Council for Chemical Industries and Fertilizers in Egypt and head of Makarem Tex company, considers it natural, in light of the current regional and international changes, that industrial and export sectors in all countries are affected, since there are existing challenges due to geopolitical tensions; as a result, Egypt is at a stage that requires the efforts of all state bodies to rearrange priorities and search for more efficient alternatives.
He tells Zawia3: “The competent government bodies are making clear efforts to ensure the stability of the work of vital sectors and to reduce the chance of any disruptions occurring. We believe in the flexibility and ability of the sector to adapt to challenges and to benefit from the opportunities available, and we deal with them in a spirit of cooperation with the competent bodies to ensure the continuity of supply and export on a regular basis. As for other sectors, each sector has its own characteristics that determine the extent to which it is affected, but continuous institutional coordination helps reduce any potential repercussions.”
Abu El-Makarem praises the efforts of the Ministry of Petroleum and Mineral Resources in managing the available resources flexibly and responsibly, considering that halting supplies to some industrial activities is to be understood in its temporary and precautionary context, and that it covers non-strategic activities or ones that can be operated with temporary alternatives. He confirms that so far there has been no substantial impact on export activities in the chemical industries and fertiliser sector, and that work is under way with industrial partners to ensure the sustainability of production operations.
He adds: “Egypt has strong institutions capable of managing crises and dealing with regional challenges, and despite the tensions in the region, the state is taking clear steps to maintain security and economic stability. As an export council, we focus on strengthening trade relations with international partners and expanding export markets, based on the state’s vision of supporting national industry and increasing non-petroleum exports.”
Egypt had recently agreed to import between 150 and 160 shipments of liquefied natural gas until 2026, worth more than USD 8 billion, according to the newspaper “Forbes Middle East”, making it the largest gas import programme Egypt has carried out since it became an exporting country in recent years.
The market will not bear further increases
Economic expert Dr Khaled El-Shafei, head of the Capital Centre for Economic Studies and Research, affirms that the problem stems from the fact that the share of gas that used to come to Egypt from Israel is no longer available, because Israel closed the field through which gas was transported and delivered to Egypt as a result of the war. Consequently, Egypt now has a shortage, estimated at the amount of the quantity that used to come from the field, and during this stage Egypt must look for other alternative markets from which to import gas to meet the needs of fertiliser, petrochemical and iron factories, even if gas prices continue to rise, or those factories must resort to reducing their production during this stage, especially since most of it, 70–80%, is destined for export; the Egyptian state has no other alternative.
He tells Zawia3: “The war will affect Egypt economically in every respect, whether in terms of the Suez Canal shipping lane and the slowdown of global trade movement and of supply chains. It will also affect Egyptian tourism, and it will affect gas quantities and lead to higher gas and oil prices, and consequently it will affect the prices of goods and products, whether those produced locally for local consumption or those destined for export. The economic situation will remain turbulent until conditions stabilise.”
He adds: “As for load-shedding, I think the Ministry of Petroleum and the Ministry of Finance took their precautions before the war by securing essential needs, especially as we are approaching the summer period. I expect the price of gas for factories to be raised in line with its global increase. But for the consumer or the citizen, no increase will take place before 1 October, based on what was agreed. Announcing another increase today would mean raising all prices once again and increasing the inflation rate; the market will not bear further increases at present.”
Amid escalating regional tensions and the repercussions of the war between Iran and the Israeli occupation state, the fragility of Egypt’s energy system in the face of geopolitical fluctuations becomes clear, as the country relies noticeably on gas imports from Tel Aviv, which has left it exposed to supply cuts with every military escalation.
While the Egyptian government seeks to make up the deficit with emergency plans and the import of additional shipments of gas and fuel, the economic effects remain far-reaching, whether on commodity prices or on the performance of export industries, and there appears to be an urgent need to expand stable long-term partnerships in the energy field, to avoid a repeat of the scenarios of halting energy supplies to factories and electricity load-shedding, especially as summer sets in.
Editorial correction: The first version of the report stated that Tehran responded with Operation “Crushing Response”; in fact, the Iranian Revolutionary Guard named the response operation “True Promise 3”, according to its announcement on 13 June 2025.
