{"id":12491,"date":"2025-04-25T14:18:52","date_gmt":"2025-04-25T12:18:52","guid":{"rendered":"https:\/\/zawia3.com\/?p=12491"},"modified":"2025-04-25T14:19:46","modified_gmt":"2025-04-25T12:19:46","slug":"egypt-israel-2","status":"publish","type":"post","link":"https:\/\/zawia3.com\/en\/egypt-israel-2\/","title":{"rendered":"Egypt and Israel: Trade Growth Amidst Political Tension"},"content":{"rendered":"

At the peak of one of the most intense phases of the Israeli\u2013Palestinian conflict, while waves of anger flood the Arab streets in protest of the bloody war in Gaza, political relations between Egypt and Israel appear visibly strained. Yet, the economic ties between the two countries are moving in a starkly different direction. Trade between Cairo and Tel Aviv has reached unprecedented levels, revealing a widening gap between public sentiment and economic interests.<\/p>\n

This contradiction raises fundamental questions: How\u2014and why\u2014are economic relations thriving between two countries whose political ties are under acute tension?<\/p>\n

Official data indicates that Israeli gas exports to Egypt have exceeded billions of dollars, while Egyptian exports of agricultural and industrial products to Israel continue to grow rapidly. In the background of this scene, a new economic map is taking shape, with interests advancing quietly amidst the noise of war\u2014driven by Egypt\u2019s pressing need for energy and foreign currency. These are relationships that transcend political and moral dimensions.<\/p>\n

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Despite what observers have described as a campaign of genocide waged by the Israeli occupation in Gaza since October 2023, and the rising tension across the Arab world\u2014including widespread boycott campaigns against Israeli products in several Arab countries\u2014Egypt\u2013Israel trade has continued to grow significantly. In 2023, Israeli exports to Egypt reached approximately $2.23 billion, while Egypt\u2019s exports to Israel stood at $347 million. During the first half of 2024, the volume of trade rose by 53% compared to the same period in the previous year, raising renewed questions about the motivations behind this growth and its broader economic and political implications.<\/p>\n<\/blockquote>\n

In addition, trade volume between Israel and Egypt reached $35 million<\/a> in June 2024, representing a 29% increase compared to June 2023, according to a report by the Abraham Accords Peace Institute, founded in 2021 by Jared Kushner, one of the architects of the historic normalization deals in the final months of the Trump administration. The institute added that \u201cbilateral trade totaled $246.6 million during the first six months of 2024, reflecting a 53% increase compared to the first half of 2023.\u201d<\/p>\n

Meanwhile, Egyptian exports to Israel doubled in 2024<\/a> compared to the previous year, according to a recent report from Israel\u2019s Central Bureau of Statistics. The data shows that Egyptian exports reached $25 million in May 2024, twice the figure from May 2023. Despite growing political tensions, cooperation between the two countries has intensified in the fields of energy and security since October, with Israeli natural gas exports to Egypt witnessing a sharp increase over the past year.<\/p>\n

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Natural Gas: The Core of Bilateral Trade<\/h2>\n

Data reveals that Israeli natural gas forms the backbone of Israel\u2019s exports to Egypt. In 2023 alone, petroleum gas exports amounted to $2.13 billion\u2014accounting for 95% of all Israeli exports to Egypt. This figure reflects Egypt\u2019s growing dependence on Israeli gas, especially amid a notable decline in its domestic production. Egypt\u2019s gas output fell by 15% between January and July 2024, prompting Cairo to ramp up imports, which reached 4.84 billion cubic meters in the first half of the year, up from 4.24 billion cubic meters during the same period in 2023.<\/p>\n

Egypt currently produces around 5 billion cubic feet of gas per day and imports approximately 1 billion cubic feet daily from Israel, while domestic consumption ranges between 6.7 and 6.8 billion cubic feet per day. According to analysts, this dependency goes beyond economic necessity and extends into strategic and security dimensions. The $15 billion gas deal signed in 2020 with companies like Delek Drilling and Chevron was not merely a commercial energy transaction\u2014it marked a strategic pivot toward broader regional cooperation between Tel Aviv and several Arab capitals.<\/p>\n

It is also worth noting that Egypt experienced a significant drop in its domestic natural gas production during the first seven months of 2024. Output declined to approximately 30.19 billion cubic meters, down from 35.5 billion cubic meters over the same period in 2023\u2014a decrease of nearly 15%. This downturn is primarily attributed to the depletion of major offshore fields such as Zohr and Zahr, alongside delays in the exploration of new reserves and postponed development projects like the Raven field, which is not expected to come online until after 2025.<\/p>\n

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More detailed data reveals a<\/a> year-on-year decline in Egypt\u2019s gas production by 17%, dropping from 59.29 billion cubic meters in 2023 to 49.37 billion cubic meters in 2024. In the Mediterranean Basin alone\u2014which accounts for 72.8% of Egypt\u2019s total output\u2014production fell by approximately 18%, directly impacting Egypt\u2019s ability to meet domestic demand. While the local market requires 6.2 billion cubic feet of gas per day, production is currently capped at 4.6 billion. This shortfall has forced Egypt to become a net importer of liquefied natural gas (LNG) for the first time since 2018, importing 2.8 million tons in 2024, while LNG exports plummeted by 84% to just 0.54 million tons.<\/p>\n

This decline has further intensified Egypt\u2019s ongoing electricity crisis, given that around 60% of the country\u2019s energy mix depends on natural gas. To compensate, Egypt has increased its reliance on Israeli imports, reaching about 1 billion cubic feet per day\u2014with projections estimating this will rise to 1.07 billion cubic feet per day by January 2025. Current plans indicate that this trend will likely continue until at least 2027 as Egypt works to bridge the supply-demand gap.<\/p>\n

According to political economy professor Karim El-Omda, the overall trade volume between Egypt and Israel is not massive, but it has risen significantly over the past two years. Based on the latest available data from 2023, Egypt\u2019s exports to Israel totaled around $200 million, while imports from Israel reached $1.3 billion\u2014bringing the total bilateral trade to approximately $1.5 billion.<\/p>\n

Speaking to Zawia3<\/em>, El-Omda explains that the sharp rise in Egyptian imports from Israel is primarily due to the gas agreement. \u201cIn 2021, our imports from Israel were just $75 million. That jumped to $850 million in 2022, and to $1.3 billion in 2023,\u201d he said. \u201cOf that figure, $1.15 billion represents natural gas imports, which Egypt receives from Israel, liquefies at its Idku and Damietta terminals, and then re-exports on Israel\u2019s behalf under a formal trade agreement.\u201d<\/p>\n

In addition to this, there is the Qualified Industrial Zones (QIZ) agreement between Egypt and Israel, which allows Egyptian exports duty-free access to the U.S. market, provided they contain a minimum of 11% Israeli input. For instance, in garment exports, components like collars and buttons for shirts or zippers and waistbands for jeans are counted toward this quota, with the remainder of the manufacturing completed in Egypt, El-Omda explains.<\/p>\n

He adds that despite the existence of normalization, Egypt does not pursue it as aggressively as other countries such as Morocco or the UAE. Egypt\u2019s economic dealings with Israel are measured and cautious, particularly given ongoing security concerns regarding potential Israeli intelligence breaches. From an economic standpoint, El-Omda acknowledges that Israel is a highly advanced industrial state, especially in technology, software, and semiconductors, making limited cooperation with Israel economically beneficial for Egypt\u2014\u201cunfortunately,\u201d as he puts it.<\/p>\n

Nevertheless, persistent political tensions and the ever-present risk of war or diplomatic crisis continue to impede any substantial progress in Egypt\u2013Israel economic relations. Thus, El-Omda concludes that normalization between the two nations remains largely symbolic rather than strategic. For comparison, he notes that trade volume between Israel and Turkey stands at around $7 billion\u2014far surpassing that between Egypt and Israel.<\/p>\n

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What Are the Most Traded Products?<\/h3>\n

A recent investigative report by Arabi Post<\/em> revealed that Egypt ranked second only to the UAE in the number of product categories (by country of origin) exported to Israel during the Gaza war, between October 2023 and February 2025. Egypt exported 924 distinct product categories, while the UAE exported 1,377. These were grouped under 76 main categories, including food products (vegetables, fruits, spices, grains, and sugar), grain milling products, cement, fertilizers, pharmaceutical products, cotton, and more.<\/p>\n

The construction materials sector topped the list of Egyptian exports to Israel, with a value of $265.6 million during the aforementioned period. Coming in second were food and beverage items, totaling $121.4 million. These included processed vegetables and fruits, grain- or flour-based products, grain milling derivatives, various food preparations, sugars and confectionery, cocoa products, and beverages.<\/p>\n

Chemical products ranked third among Egypt\u2019s exports to Israel, followed by machinery and equipment. Also notable were garments, textiles, and home furnishings. Other exported items included pharmaceutical products worth $636,700, beverages such as mineral water, essential oils, cosmetics and perfumes, children’s toys, plastic goods, wood products, and paper.<\/p>\n

On the other side, Israeli data detailed exports to Egypt during the same period\u2014October 2023 to February 2025. Israel exported 165 product categories under 45 main headings. Leading exports included diverse chemical substances used in the textile industry, fabrics, fertilizers, paper, and clothing. Food-related exports included milled grain products and spices, as well as materials used in garment production. The total value of Israeli exports to Egypt during this period reached $466 million\u2014$327 million of which were chemical products, followed by $97.2 million in textile and apparel products, and the rest in plastic, rubber, and paper goods.<\/p>\n

Don’t miss: Egyptians Trapped in Gaza for a Year and a Half<\/a><\/strong><\/p>\n

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Nitzana Border Crossing and Logistics Expansion Plans<\/h3>\n

As part of future trade expansion, Cairo and Tel Aviv announced plans<\/a> to develop the Nitzana border crossing into a logistics hub for non-oil trade. The project aims to increase the annual trade volume to $700 million by 2025, focusing on cooperation in smart agriculture, environmental technologies, and sustainable transportation. Nitzana is seen as a strategic logistical channel to double trade volumes and diversify traded goods.<\/p>\n

Data from maritime tracking platforms MarineTraffic and Vesselfinder indicate that dozens of vessels travel monthly from Egypt to Tel Aviv. The ports of Abu Qir, Al-Arish, Port Said, Damietta, and Suez are key exit points for Egyptian goods, while Ashdod and Haifa handle most Israeli cargoes. These ships often sail under various flags, including those of Panama, Liberia, Spain, Singapore, Denmark, and Saint Vincent and the Grenadines.<\/p>\n

Although the nature of cargo isn\u2019t always specified on shipping trackers, the ship types often provide clues\u2014some transport containers or petroleum, others carry construction materials or coal, while the majority appear to be general cargo or food supply vessels. One such ship, the Shira-e, sailing under the flag of Saint Kitts and Nevis, traveled from Al-Arish to Ashdod on September 9.<\/p>\n

The most surprising case, according to The Arab Diplomat<\/em>, involves the Pan GG, a ship flying the Egyptian flag. This vessel has been making regular trips between Egyptian ports and Israeli ports not just since the launch of Operation Al-Aqsa Flood, but since 2020, when it was acquired by an Egyptian owner. According to vessel information on the MarineMan platform, the ship\u2019s management office is located in Heliopolis, Cairo, confirming that it transports Egyptian goods directly to Israeli ports.<\/p>\n

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Historic Agreements and Their Impact on Joint Economies<\/h3>\n

Economic cooperation between Egypt and Israel is anchored in the 1979 Peace Agreement, which laid the foundation for diplomatic and commercial ties. One of the most significant economic milestones was the signing of the Qualified Industrial Zones (QIZ) agreement in 2004. This deal enabled Egypt to export products duty-free to the U.S., provided they contain at least 11% Israeli content.<\/p>\n

Since then, Egypt\u2013Israel economic relations have seen considerable development across various sectors\u2014textiles, machinery, chemicals, vegetables, and cotton. Cooperation has not been limited to trade but has extended into agriculture, particularly in desert development, irrigation systems, greenhouse vegetable production, veterinary vaccine manufacturing, and fruit cultivation.<\/p>\n

Israeli exports to Egypt grew from $50 million annually to over $200 million between 2011 and 2012. However, this momentum declined later, as Egypt reduced its imports of chemicals and plastics, pushing Israeli exports below $100 million by 2016.<\/p>\n

At the same time, following the halt of Egyptian gas exports to Israel after the 2011 revolution, Israeli imports from Egypt sharply declined. From 2011 to 2016, Israeli imports from Egypt dropped to just $50 million per year, with significant falls in chemicals, plastics, and metal products, which shrank to $15 million by 2016. The only remaining Egyptian exports to Israel during that period were minimal amounts of chemical and plastic products.<\/p>\n

On the other hand, imports of agricultural and food products remained relatively stable, ranging between $20 and $30 million annually, while the value of other imports stood at around $20 million.<\/p>\n

Overall, the energy sector tops the list of driving forces behind the expanding economic relationship between the two countries. Amid Egypt’s ongoing energy crisis since mid-2023\u2014which led to electricity cuts of up to three hours daily during the summer of 2024\u2014Israeli gas emerged as a strategic option to stabilize the national electricity grid.<\/p>\n

The growing trade relationship also coincides with broader regional efforts to deepen cooperation under the framework of the Abraham Accords, paving the way for new economic alliances that transcend traditional geopolitical alignments and redraw the region\u2019s geo-economic map.<\/p>\n

Despite the positive economic indicators, Egypt\u2013Israel trade has come under fire from large segments of public opinion in Egypt and the wider Arab world, especially in light of the ongoing war in Gaza and the worsening humanitarian crisis. The doubling of Egyptian exports to Israel during this period has sparked moral and political questions, placing the Egyptian government under scrutiny from both domestic and international observers.<\/p>\n

Furthermore, expansion plans for Israeli imports, particularly in the energy sector, have raised concerns about increasing economic dependency and diminished national control over Egypt\u2019s sovereign resources at a time when the country urgently needs to boost its own energy production.<\/p>\n

Economic expert and vice president of the Popular Alliance Party, Elhami El-Merghany, stressed that “the collective memory of nations does not forget or accept economic dealings with the occupying state,” expressing outrage that trade between Egypt and Israel reached record highs during the past three years, even as the war in Gaza rages on, causing tens of thousands of Palestinian casualties. Speaking to Zawia3<\/em>, El-Merghany said, \u201cIt is deeply regrettable that while Palestinians are being slaughtered and besieged, Egypt and other Arab states like the UAE, Morocco, and Jordan continue to expand trade with the Israeli occupier.\u201d<\/p>\n

He pointed out that trade volumes jumped from $127 million in 2020 to $190.8 million in 2021, and then soared to $2.1 billion in 2022, $2.6 billion in 2023, and $3.2 billion in 2024. There are now opportunities for further growth, especially given Egypt\u2019s growing reliance on Israeli gas, with the government announcing plans to increase imports by 58%, up from the current 950 million cubic feet per day, starting in the second half of the year to meet peak summer demand.<\/p>\n

According to Egypt\u2019s Central Agency for Public Mobilization and Statistics (CAPMAS), trade between Egypt and Israel increased by 21.3% in 2024. Official data shows that popular and official outrage in Egypt over Israel\u2019s war on Gaza\u2014which killed nearly 48,000 Palestinians\u2014has not been reflected in trade volumes, which rose to $3.2 billion in 2024, up from $2.64 billion in 2023.<\/p>\n

Egyptian imports from Israel rose by 17% in 2024, reaching $2.9 billion, up from $2.5 billion in 2023. Meanwhile, Egyptian exports to Israel nearly doubled, increasing by 95.6%, from $145 million in 2023 to $284 million in 2024.<\/p>\n

El-Merghany further noted: \u201cDozens of companies are involved in trade with the Zionist entity, including Cottonil, Fresh Electric, Evergrow, Kandil Glass, Green Land International for frozen foods, Egypt Marble and Granite, as well as other firms like Nile Oils and Detergents, Misr Chemicals, Samsung Electronics Egypt, and Raya Foods\u2014in addition to companies operating under the QIZ framework.\u201d<\/p>\n

Moreover, Japanese shipping company Ocean Network Express (ONE), headquartered in Singapore, recently announced a new weekly shipping route that links Damietta Port in Egypt with Haifa and Ashdod ports in Israel.<\/p>\n

Amid heightened political conflict and widespread public opposition to normalization, Egypt\u2013Israel trade relations stand out as a paradoxical case, defying conventional logic in the understanding of inter-state relations. The numbers tell a different story\u2014one where economic realities trump political slogans, driven by Egypt\u2019s urgent need for energy, foreign currency, and longstanding strategic commitments that appear immune to political volatility or public sentiment. While official normalization remains cautious and limited, the machinery of trade continues to operate quietly, bypassing rhetoric, and entrenching a new pattern of regional engagement defined more by cold interests than by ideological principles.<\/p>\n","protected":false},"excerpt":{"rendered":"

Despite escalating political tensions and the Gaza war, Egypt-Israel trade has surged to unprecedented levels, driven by energy needs and economic interests, raising questions about sovereignty, public sentiment, and the future of regional relations<\/p>\n","protected":false},"author":11,"featured_media":12442,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"om_disable_all_campaigns":false,"footnotes":""},"categories":[409],"tags":[10782,10780,10781,10783,10779,10778,10784,815,10785,10786],"kateb":[710],"class_list":["post-12491","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-economics-en","tag-abraham-accords-economy","tag-cairo-tel-aviv-relations","tag-egypt-economic-crisis","tag-egypt-israel-cooperation","tag-egypt-israel-gas-imports","tag-egypt-israel-trade","tag-egyptian-exports-to-israel","tag-gaza-war-impact","tag-israeli-imports-to-egypt","tag-middle-east-trade-growth","kateb-zawia3-com"],"jetpack_featured_media_url":"https:\/\/zawia3.com\/wp-content\/uploads\/2025\/04\/\u0645\u0635\u0631.png","_links":{"self":[{"href":"https:\/\/zawia3.com\/en\/wp-json\/wp\/v2\/posts\/12491","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/zawia3.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/zawia3.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/zawia3.com\/en\/wp-json\/wp\/v2\/users\/11"}],"replies":[{"embeddable":true,"href":"https:\/\/zawia3.com\/en\/wp-json\/wp\/v2\/comments?post=12491"}],"version-history":[{"count":3,"href":"https:\/\/zawia3.com\/en\/wp-json\/wp\/v2\/posts\/12491\/revisions"}],"predecessor-version":[{"id":12500,"href":"https:\/\/zawia3.com\/en\/wp-json\/wp\/v2\/posts\/12491\/revisions\/12500"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/zawia3.com\/en\/wp-json\/wp\/v2\/media\/12442"}],"wp:attachment":[{"href":"https:\/\/zawia3.com\/en\/wp-json\/wp\/v2\/media?parent=12491"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/zawia3.com\/en\/wp-json\/wp\/v2\/categories?post=12491"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/zawia3.com\/en\/wp-json\/wp\/v2\/tags?post=12491"},{"taxonomy":"kateb","embeddable":true,"href":"https:\/\/zawia3.com\/en\/wp-json\/wp\/v2\/kateb?post=12491"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}