Egypt Searches for Alternative Fuels Amid Gas Supply Crisis from Israel

In an effort to avoid electricity outages, Egypt is seeking alternative fuel supplies after the crisis in the Middle East halted gas flow from Israel. The Egyptian government plans to announce a tender this month for up to one million tons of fuel oil, with deliveries scheduled for August, according to Bloomberg sources. This follows a recent tender for fuel oil and aims to cover energy production needs as tensions between Israel and Iran threaten natural gas supply. On Friday, June 13, 2025, Israel ordered two natural gas production projects, including its largest Leviathan field, to shut down due to security concerns following Iranian counterattacks. This disrupted supplies to import-dependent Egypt, which subsequently cut off supplies to several energy-intensive industries to keep power plants operational. However, the prolonged absence of Israeli supplies risks disrupting electricity generation. President Abdel Fattah El-Sisi’s government has launched a plan to prevent shortages like those seen last summer when demand spikes caused nationwide blackouts and widespread dissatisfaction amid high inflation. “We are working hard to keep our promise to avoid any blackouts, but what happened yesterday has immediate consequences on a large part of the natural gas required for power stations,” said Egyptian Prime Minister Mostafa Kamal Madbouli in a televised press conference on Saturday, June 14, 2025. He urged citizens to reduce electricity consumption to avoid outages this summer. Besides reducing natural gas supply, authorities also halted flows of fuel oil and diesel to certain other industries for two weeks to free about 9,000 tons of diesel per day for power plants until more imported liquefied natural gas (LNG) becomes available, sources stated. Egypt faces a daily natural gas deficit of approximately 3.5 billion cubic feet, with Israel providing around 800 million to one billion to partly fill this gap. The remaining shortfall is covered by LNG imports, with the country recently signing bulk supply agreements with several companies over the next two years. Egypt has also planned to add several floating units for fuel import and is in talks with Qatar for long-term natural gas supply contracts. It has also purchased LNG cargoes from the spot market in recent months. “The real issue for Cairo is that it has become a clear importer of natural gas, something unlikely to change in the short term, meaning Israeli natural gas is now a component of the domestic mix,” said Riccardo Fabiani, program director for North Africa at the Brussels-based International Crisis Group. The prospect of a new shortage comes as summer demand rises. Temperatures in Cairo are expected to reach 38 degrees Celsius next week. The Ministry of Health issued guidelines on Saturday, including avoiding sunlight during peak hours, to protect citizens. The net bill of energy imports for the North African country more than doubled last year to $11.3 billion, according to Goldman Sachs. This contributed to the current account deficit rising to 6.2% of GDP from 3.2%. Egypt’s summer energy bill could rise to about $3 billion per month from July, up from approximately $2 billion last year, according to a person familiar with the matter in May. Current Egyptian natural gas production is estimated at around 4.2 billion cubic feet daily, while domestic demand reaches approximately 6.2 billion cubic feet daily, usually rising to 7 billion daily during summer months due to increased electricity demand for cooling. “Egyptian authorities are trying to boost exploration and increase production by encouraging foreign companies, but these efforts are complex, their results uncertain, and they will only bear fruit in the long term,” said Fabiani.