For several weeks during the spring, Cairo, a city known to never sleep, was forced to dim its lights. Government regulations reduced streetlights and ordered shops, restaurants, and cafes to close at 9 p.m. as the war in Iran drove up fuel costs and disrupted Egypt’s energy supplies. While the measures were temporary, the underlying vulnerability surrounding them is not.
The Iran war exposed a vulnerability that extends well beyond electricity supply. Amid the global energy crisis sparked by the Iran war, Egypt has endured frequent power cuts and price hikes. These measures not only put pressure on Egyptian households but also impair further government efforts to revive economic growth. With foreign investors already wary of throwing their weight behind the Egyptian market, repeated power shortages and emergency conservation measures make attracting long-term capital even harder.
Breaking free from this vulnerability requires treating energy security as an immediate political and economic priority. What is needed is a two-track strategy: accelerating Egypt’s green energy buildout while managing its natural gas reserves for sustained output rather than short-term gains.
Egypt’s geopolitical energy constraints
The Iran war exposed the price of Egypt’s dependence on energy supplies from neighboring countries vulnerable to regional conflict.
In his 2004 book Whatever Happened to Egyptians? From the Revolution to the Age of Globalization, the late Egyptian economist and intellectual Galal Amin identified a structural weakness in the Egyptian economy. He argued that Egypt’s economic revenue is not propped up by production, but by politically volatile, externally driven inflows, including the Suez Canal, remittances, and tourism.
Two decades later, Amin’s structural logic now applies to the energy sector.
Egypt’s industrial base relies heavily on Israeli natural gas, which accounts for roughly 15 to 20 percent of Egypt’s total gas consumption. This has meant that Egypt has paid a dear price for regional conflicts that Cairo has repeatedly sought to contain diplomatically, from Lebanon to Iran to Gaza.
After the United States and Israel jointly attacked Iran this February, Israel was forced to temporarily shut down its largest gas field, Leviathan, as officials prepared for a potential retaliation. Shortly after, Israel halted its natural gas supply to Egypt. Flows plunged to just fifty million cubic feet of gas per day, down from an average of roughly one billion.
The consequences rippled through the economy quickly. The drastic natural gas shortage not only led to government-imposed energy conservation policies, but also paused production across key Egyptian industries altogether for several months. Each new round of attacks involving Israel, the United States, and Iran has created an economic chain reaction for Egypt, disrupting industry, raising energy and food prices, and shocking an already fragile economy.
Prioritizing domestic production while accelerating renewable energy
While Egypt’s current energy strategy was a logical response to the government’s struggle to address arrears to foreign energy companies and a foreign-currency crunch, today, that calculation no longer holds. Egypt’s gas import bill rose 26 percent to $10.7 billion in fiscal year 2026–27, driven in part by emergency liquefied natural gas price hikes after imported pipeline flows collapsed overnight.
For Egyptian stakeholders, the lesson should be clear, albeit not easy: a long-term, comprehensive recalibration of Egypt’s energy sector is less costly than maintaining the status quo of overreliance on energy imports.
With arrears to energy companies finally fully paid and with those companies better positioned to resume domestic offshore exploration, every additional cubic foot of gas Egypt produces reduces its exposure to the volatile market. Egypt’s escape from this dilemma requires pursuing two policy objectives: establishing Egypt as a renewable energy powerhouse and avoiding past mistakes in the management of its domestic gas fields. Together, these policies would strengthen energy security and support Cairo’s ambition to become a regional energy hub.
The government has publicly acknowledged the importance of renewable energy infrastructure, setting an ambitious target of generating 42 percent of its electricity from renewable sources by 2030. Yet renewables currently account for only 12 percent. Considering Egypt’s abundant sunshine and renewable-energy potential, that gap suggests that turning Egypt into a green energy hub has not yet received the level of priority it warrants.
Removing bureaucratic barriers for local energy companies and providing a strategic mix of private and public financing for projects such as the Dandara Solar Park and Obelisk Solar Power Plant, both still in the first phase of development, could accelerate that transition.
This is only the first half of the equation. The second is that Egypt must also avoid policy missteps and operational mistakes that have shortened the productive life of existing natural gas fields. The Zohr gas field offers a cautionary tale. The fast-tracked deepwater gas development had reached an output of 2.7 billion cubic feet per day by August 2019, boosting Egypt’s energy independence and helping turn the country into a net exporter to neighboring countries for several years. Unfortunately, by 2021, Zohr’s production had fallen below two billion cubic feet per day. Aggressive early production and an overreliance on Zohr contributed to a steeper decline than originally anticipated by the overseeing company, Eni.
Revising management terms with private companies in order to protect the lifespan of reservoirs and using third-party regulatory institutions to improve measurement and oversight could help prevent another Zohr-style decline. Ensuring better management of future discoveries, such as the new Agiba Petroleum discovery—the largest Western Desert hydrocarbon discovery in fifteen years—is a crucial step that can help Egypt simultaneously sustain domestic hydrocarbon growth and expand its renewable energy sector.
Two decades after Galal Amin diagnosed Egypt’s dependence on externally driven and politically volatile sources of revenue, a similar structural vulnerability has emerged in the country’s energy sector. To break the cycle of import overreliance and limited energy security, Cairo must make domestic energy resilience a political priority: one that pushes Egypt’s green infrastructure past its current 12 percent share toward the 42 percent target while managing new gas discoveries for longevity rather than maximizing short-term output.
The choice before Cairo is between continuing to manage one energy shock after another or finally building the productive capacity to escape the cycle of limited-source dependency.
Nour Taha is a program assistant with the Transatlantic Project and Syria Project at the Atlantic Council’s Middle East programs who also supports the Iraq Initiative and North Africa team.
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Image: Kids hold their mobile phones during the power off time that the government applied in Cairo, Egypt, on June 25, 2024. Photo via REUTERS/Mohamed Abd El Ghany.