On 7 August this month, Tel Aviv announced the conclusion of “the largest gas deal in its history” with Cairo, worth $35 billion, to export about 130 billion cubic metres of natural gas until 2040, or until the quantities stipulated in the contract have been fulfilled, according to what was revealed by the Israeli Energy Minister, Eli Cohen.
The deal, which was signed between Israeli companies, most prominently “NewMed”, a partner in the giant Leviathan field, and the Egyptian side, does not represent a mere economic agreement; rather, it redraws the map of mutual dependence between two states bound by complex political relations and a tense popular memory, as it triples the volume of exports that began in 2019 (60 billion cubic metres at the time), making Egypt the largest destination for Israeli gas in the region.
The Israeli Energy Minister did not hide the deal’s implications, considering it “important news from a security and political standpoint, as well as from an economic standpoint”, and stressing that it consolidates his country’s position as a “leading regional energy power on which its neighbours rely and which they need”. According to his statement, the deal will bring billions of dollars into Israel’s treasury, provide job opportunities and strengthen its economy.
Despite the official silence in Cairo, the Reuters news agency says that this agreement may ease the energy crisis that Egypt has faced for two years, which has pushed it to spend billions of dollars on importing liquefied natural gas after its domestic supplies fell short of meeting demand. It represents an additional advantage for Tel Aviv, since the gas is pumped through pipelines, which makes it much less costly than liquefied natural gas, which requires super-cooling and shipping by sea before being converted back into gas.
The contradiction in the Egyptian position
The timing of the deal coincides with political and security tensions between Cairo and Tel Aviv reaching their peak. The war that has been ongoing in Gaza since October 2023 has put relations to the test, as Egypt took a declared position rejecting the forced displacement of the Strip’s residents and warning against any Israeli military operations on the border with Sinai. These positions were accompanied by broad popular and media pressure inside Egypt demanding the severing or freezing of any form of cooperation with Israel, particularly in economic matters.
Despite the existence of the peace treaty signed in 1979, relations remained governed by a low ceiling of openness, and cooperation was often confined to border security issues and the exchange of information on counter-terrorism in Sinai. As for economic cooperation, it was conducted in relative silence, avoiding wide announcement of its details in order to avoid popular reactions.
But the latest deal, with its record size and its value of $35 billion, turned this equation upside down, as it was signed at a time when Egypt has not hidden its criticism of Israeli military operations in Gaza, and Israel has not hidden its displeasure with Cairo’s positions on some regional issues. This coincidence cast heavy shadows over the agreement, and made it a byword for the contradiction between cautious political discourse and pragmatic economic reality, where energy interests meet on common ground despite deep political differences, according to observers.
What we know about the agreement
In late July 2025, Israeli economic media outlets, including “Globes” and “TheMarker”, published information indicating that the Israeli Ministry of Energy had approved amending the gas export terms of the company “Delek” and its partners, allowing an increase in the quantities supplied to Egypt via the “EMG” pipeline that links Ashkelon and El-Arish.
According to the same sources, the agreement aims to compensate for the sharp decline in Egypt’s domestic gas production, which has been affected since mid-2023 by the decline in production from the “Zohr” field, Egypt’s largest gas field, and by the drop in new investments in the energy sector because of the economic crisis. Estimates indicate that Egypt lost nearly 25% of its production capacity over the last two years, causing a domestic deficit that forced the government to cut electricity in some areas during the summer of 2024, which provoked widespread popular discontent.
On the other hand, the Egyptian government has not officially announced the details of the agreement, and no statements had been published by the Egyptian Ministry of Petroleum or by the Egyptian Natural Gas Holding Company (EGAS) up to the time of writing this report. Although the news circulated in international media, the official silence in Cairo was notable, especially amid escalating regional tensions and the ongoing war in Gaza.
For its part, the company “NewMed Energy” (formerly Delek) confirmed that the agreement with Egypt includes “expanding exports from the Leviathan and Tamar fields”, and the additional quantity is expected to amount to about 3 billion to 4 billion cubic metres annually, to be supplied over several years. Estimates indicate that the value of the deal may exceed $1 billion, according to current global prices, but without any official announcement of the selling price or the payment terms.
This agreement also comes at a sensitive time for Israel, which seeks to maintain its gas exports as a strategic tool in its regional relations, especially with its allies in Europe and the Middle East. Some Israeli analyses indicate that Cairo is a key partner in this strategy, since it has the infrastructure needed to liquefy gas and export it to Europe, through the Idku and Damietta terminals.
Who benefits?
Sarah Kira, director of the European North African Center for Research, says in exclusive statements to Zawia3 that the Egyptian state deals with the gas file from a purely pragmatic perspective, one that puts the interest of the state and the people first and last, noting that the agreements concluded with the Israeli side have raised several questions in the Egyptian street about the nature and scale of cooperation in this file.
Sarah explains that Egypt worked in a studied manner to demarcate its maritime borders in its territorial waters and its exclusive economic zone in the Mediterranean, in order to ensure maximum benefit from gas discoveries within the framework of international law, especially after the growth of discoveries in regional fields such as “Tamar” and “Leviathan” in Israel, and “Zohr” in Egypt.
She adds in her conversation with us: “Egypt drew up its development plans on the basis of the future of gas supply, not only from its own territory but also from the region as a whole, particularly from the member states of the East Mediterranean Gas Forum (EMGF), which was established to coordinate cooperation in the gas sector, and in which Israel, Cyprus, Greece, Italy, France, Jordan and Palestine participate, alongside Egypt, which hosts its headquarters in Cairo.”
She continues: “This regional coordination enabled Egypt to restart gas pipelines and liquefaction facilities, which strengthened its ability to import gas, liquefy it and then re-export it to Europe, which contributed to increasing foreign currency income and supported the national economy significantly.”
Regarding the agreements with the Israeli side, Sarah affirms that cooperation in this file is not new, but began years ago, explaining: “In 2022, Egypt signed memoranda of understanding allowing Israeli gas to pass through Egyptian liquefaction terminals for export to the European Union, and these agreements later expanded, until a huge expansion agreement between Egypt and the partners of the Leviathan field, worth nearly $35 billion, was announced in August 2025.”
Kira points out that this latest agreement aims to supply Egypt with increasing quantities of gas over the coming decades, starting from about 4.5 billion cubic metres annually and reaching about 12 billion cubic metres by 2029, according to what the Israeli side announced.
Kira believes that these agreements contributed to establishing integrated technical corridors that include pipelines and liquefaction facilities, which made the Eastern Mediterranean more interconnected in energy terms, but at the same time increased the sensitivity of these partnerships to political and security changes.
She explains: “Both sides, the Egyptian and the Israeli, benefit from these agreements. Egypt succeeded in neutralising any potential disputes over gas by demarcating the maritime borders with Israel in advance, and by binding it to the mechanisms of the East Mediterranean Gas Forum, which is taking place under the eyes of Europe.”
She continues: “Egypt also benefits from the capacity of its existing liquefaction terminals, which allow it to convert imported gas into liquefied gas (LNG), or to reinject and process it and then export it to Europe, which is reflected positively in investments in infrastructure and in operational capabilities, in addition to its contribution to raising the efficiency of the Egyptian energy sector.”
She goes on: “As for Israel, it benefits from this partnership by marketing its production from the Leviathan and Tamar fields to a broad regional market, in addition to opening new export outlets through Egyptian facilities, especially to Europe, without the need to build new infrastructure on its own territory.”
Kira concludes by saying: “Cooperation with the Israeli side gives Egypt an additional advantage, namely obtaining gas at prices lower than global prices, then processing, liquefying and re-exporting it with a large profit margin, which boosts the flow of hard currency into the Egyptian market and supports the stability of the national economy in one of the most important strategic files at present.”
A crime against the homeland
For his part, the economist and chairman of the board of trustees of the Socialist Popular Alliance Party, Zohdy El-Shamy, describes the deal as “a new strategic catastrophe” and “a long-term shackling of Egypt’s decision-making in the field of energy”, considering that it represents a continuation of wrong policies that have placed the country at the mercy of Israeli gas.
El-Shamy says in exclusive statements to Zawia3 that the ruling authority was supposed to have learned from its previous mistakes, when years ago it signed a deal to import gas from Israel worth $15 billion, which was later raised to $20 billion, instead of investing in developing Egyptian gas fields and achieving self-sufficiency. He explains: “The paradox is that these Israeli fields, from which we export today, are geographically closer to Egyptian waters, and there are legitimate suspicions that they contain Egyptian gas that was seized because of the lack of decisiveness in demarcating the maritime borders early on”.
El-Shamy points out that the authorities at the time promoted to public opinion the idea that importing Israeli gas was aimed at liquefying it at the Idku and Damietta terminals and re-exporting it, so that Egypt would profit from the price difference, “but the reality that the market and citizens lived is that those quantities went mostly to domestic consumption, to compensate for the production deficit, while the matter was portrayed in the media as if it were an economic achievement”, as he puts it.
El-Shamy criticises what he describes as the “glaring contradiction” in policies, explaining that Egypt’s dependence on Israeli gas restricts its ability to take firm positions towards what he calls “Israeli aggression and thuggery”, as Israel can use this dependence as a political and economic pressure card in times of crisis. He adds: “Instead of the government planning to end this humiliating situation and to reform its energy policies, we find it today expanding the scope of dependence on the same source, with a much larger deal, reaching $35 billion and extending until 2040”, considering that this “mortgages part of Egyptian national security to the considerations of the Israeli market”.
The economist considers that this step is not merely a commercial agreement, but “a reformulation of the power relations between Cairo and Tel Aviv on bases that make the latter a compulsory partner in the Egyptian energy equation”. He poses sharp questions: “What does it mean to tie our energy needs to a single source in a state that occupies Arab land and is waging an ongoing war on our borders? And what logic makes us double our dependence instead of looking for alternatives?”
He says: “What is happening is not merely an error of judgement, but a major crime against Egypt and its national security, because it puts us in the position of a dependant, not a partner, and binds us to policies that may one day conflict with our national interests. It is a political and economic absurdity for which Egyptians will pay the price for decades to come”.
How has the gas map in the Eastern Mediterranean changed?
Less than a decade ago, Egypt was being heralded as about to become a rising regional power in the energy field, after the discovery of the giant “Zohr” field in 2015, which was described at the time as a “strategic transformation” in the country’s economic future. With the start of production in late 2017, Cairo moved to export its surpluses, and concluded a series of agreements to liquefy gas on behalf of neighbouring countries, including Israel, which saw in the Egyptian infrastructure a precious opportunity to overcome export obstacles.
But this picture began to change gradually with internal complications and the shifting regional energy equation. By 2023, “Zohr” production had begun to decline, as a result of what technical reports described as a shortfall in pumping and a drop in the rate of new discoveries, against a rise in domestic demand due to population growth and the growth of energy-intensive industries. Meanwhile, Israel was accelerating its steps in developing its offshore fields, particularly “Leviathan” and “Tamar”, which together became the centre of gravity on the Israeli gas map.
With the 2018 agreement between the Israeli company “Delek” and the private Egyptian company “Dolphinus”, Egypt began importing gas from Israel with the aim of re-liquefying it and exporting it to Europe. At the time, the deal was promoted as part of a strategy to turn Egypt into a regional energy hub, but the reality is that some quantities were being used to cover the domestic deficit, at a time when official discourse focused only on exports and profitability.
Today, with the intensification of the domestic energy crisis in Egypt and the emergence of indicators of a contraction in export revenues, the latest agreement has once again shed light on a striking paradox: Egypt, which was among the first countries in the region to discover gas, finds itself forced to rely on Israeli gas to secure its basic needs. As for Israel, it has turned from a buyer of Egyptian gas in the past decade into its main source now, at the heart of a complex economic relationship that goes beyond economics to enter deep into the balances of power and politics in the Eastern Mediterranean.
The figures indicate that Israeli natural gas represents the backbone of Israel’s exports to Egypt; exports of petroleum gas alone reached $2.13 billion in 2023, equivalent to 95% of total Israeli exports to Egypt. This proportion is a reflection of Egypt’s growing dependence on Israeli gas, particularly amid the marked decline in domestic production. Egypt’s gas production fell by 15% between January and July 2024, which prompted Cairo to intensify its imports, which reached 4.84 billion cubic metres during the first half of the current year, compared with 4.24 billion cubic metres in the same period of the previous year.
Egypt’s gas production currently stands at about 5 billion cubic feet, and it imports about one billion cubic feet daily from Israel, while consumption ranges between 6.7 and 6.8 billion cubic feet daily. This dependence, according to observers, goes beyond the economic aspect to reach strategic and security aspects, since the gas deal signed in 2018, worth $15 billion, with companies such as “Delek Drilling” and “Chevron” was not merely an energy deal but part of a broader regional track to strengthen cooperation between Tel Aviv and several Arab capitals.
It should be noted here that Egypt witnessed a marked decline in its domestic production of natural gas during the first seven months of 2024, as production fell to about 30.19 billion cubic metres compared with 35.5 billion cubic metres during the same period of 2023, a decline of nearly 15%. This decline is mainly due to the depletion of major offshore fields such as the “Zohr” field, in addition to the slowdown in exploration for new fields and delays in planned development projects, such as the “Raven” field, which are expected to come into service after 2025.
More detailed data showed an annual decline in gas production of 17%, as it fell from 59.29 billion cubic metres in 2023 to 49.37 billion cubic metres in 2024. The decline in the Mediterranean basin alone, which accounts for 72.8% of Egyptian production, amounted to about 18%, which directly affected Egypt’s ability to meet domestic demand. The local market needs 6.2 billion cubic feet per day, while production does not exceed 4.6 billion. This led to Egypt becoming a net importer of liquefied gas for the first time since 2018, as it imported 2.8 million tonnes during 2024, while its exports of liquefied gas fell by 84% to 0.54 million tonnes.
This decline contributed to worsening the crisis of recurrent power cuts, given that 60% of Egypt’s electricity mix depends on natural gas. To compensate for the shortfall, Egypt increased its dependence on Israeli imports, as the quantities imported from Israel reached about one billion cubic feet per day, with expectations that they will rise to 1.07 billion cubic feet per day by January 2025. This trend is expected to continue until 2027, according to current plans to bridge the gap between supply and demand.
Editorial correction: The first version of the report stated that the gas deal worth $15 billion was signed in 2020; in fact, it was signed in February 2018 between “Delek” and its partners and the Egyptian company “Dolphinus”, and supply under it began in January 2020.
