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Analysis

Egypt’s Energy Challenges and Their Political Implications for the War in Gaza

Natural gas in Israel - Wikipedia
Natural gas in Israel - Wikipedia

Ambassador (ret.) Michael Harari

BESA, June 23, 2024

“Cairo wants to bring about an end to the war, but not in a way that creates achievements for Hamas.”

Egypt’s energy problems worsened in the summer of 2023 when the authorities were forced to initiate power outages in response to heat-wave-induced high demand for electricity. Moreover, the country’s gas discoveries proved disappointing. The Zohr gas field, which the Italian energy company ENI discovered in 2016 and was named the largest in the Eastern Mediterranean, turned out to be much smaller. Estimates today are at about 11 TCF, which is roughly a third the amount announced upon the field’s discovery. It is similar in size to Israel’s Tamar field and smaller than Leviathan. Another discovery that turned out to be a letdown was the Orion field.

The war in Gaza caused further damage to Egypt’s energy sector and affected the treasury in Cairo. When Egypt became an energy exporter in 2019, its dependence on gas imports from Israel increased. The quantities of gas exported from Israel have increased since 2020. In 2022, Israel exported about 5.8 BCM to Egypt, and by the end of 2023 those quantities had apparently increased slightly. The Israeli Ministry of Energy recently approved the increase of exports from Tamar and the expected implementation will be from the middle of next year.

Israel’s decision to shut down the Tamar field at the outbreak of the war caused the Egyptians serious problems. In addition to having less gas supply available for the Egyptian economy, Cairo could not export liquefied gas to Europe, which made the country’s economic situation even worse. The resumption of Tamar’s activities in mid-November evoked a sigh of relief in Cairo (and in Israel, of course). ...SOURCE

Ambassador (ret.) Michael Harari joined the Israeli Foreign Ministry and served more than 30 years in a range of diplomatic roles in Israel and abroad, including (among others) in Cairo, London and Nicosia. His final position abroad was as Israeli Ambassador to Cyprus (2010-2015). Today he serves as a consultant in the fields of strategy, policy and energy and lectures in the Political Science Department at the Jezreel Valley College.

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