Egypt is confronting the worst period of regional economic turbulence since the Gaza-Red Sea crisis of 2024 as the fallout from the US-Israeli strikes on Iran early on Saturday continues.
Cairo has activated its national crisis operations room, responsible for hourly co-ordination among ministries to track developments across energy, food, security, and consular channels.
Officials said reports were being submitted hourly to Prime Minister Mostafa Madbouly.
Gas supply cut and energy contingency
Israel’s decision Saturday to suspend natural gas exports to Egypt and Jordan indefinitely under a force majeure clause in their gas deal marked the most immediate shock to Cairo’s energy balance.
The volumes, roughly 1.1 billion cubic feet a day from the Tamar and Leviathan offshore fields, covered an important share of Egypt’s demand.
The stoppage followed the weekend strikes between the US, Israel, and Iran, but Egypt, which consumes about 6.2 billion cubic feet a day against domestic output of near 4.1 billion, has moved swiftly to offset the loss.
The Energy Ministry, in a statement, confirmed that Egypt has leased floating storage and regasification units with a combined capacity near two billion cubic feet a day. It reiterated plans announced in February to import 75 liquefied natural gas cargoes this year, worth $3.75 billion.
It also outlined a year-long programme of measures including LNG procurement from global partners, new long-term gas contracts, expanded domestic refining, and large-scale fuel storage to support market stability.
The ministry insisted that the halt “has no current impact on electricity or industry,” quoting extensive preparations through 2025 to expand import capacity and diversify suppliers.
Suez Canal setback and global trade reroutes
Just hours after the gas suspension, France’s CMA CGM, the world’s third-largest shipping group, ordered its vessels to “take shelter,” suspending trave along the Suez Canal and rerouting ships around the Cape of Good Hope.
Economist and academic
The decision followed earlier moves by Hapag-Lloyd and Maersk, dealing another blow to Egypt’s foreign currency lifeline.
The Cape diversion extends voyages by thousands of kilometres, delaying cargo, raising freight premiums, and depriving Cairo of Suez toll revenue.
Canal Authority chief Osama Rabie had expected normal traffic by mid-2026 after Red Sea disruptions as a result of Israel’s war on Gaza. Those forecasts now appear increasingly optimistic.
Independent economist and private consultant on Egypt's government policy Moustafa Badra, speaking to The National on Sunday, said that the reroutes are a damaging blow to Egyptian hopes of a near-term recovery.
“The reroutes, of course, are a disastrous development, after so much work on the Egyptian side to restore these companies’ trust in the canal after the Houthi disruptions and now who knows when they will feel safe to use the canal again,” Mr Badra added that market sentiment is deteriorating rapidly.
“The Egyptian Stock Exchange is continuing to come down, foreigners are continuing to leave Arab markets and this is something we are seeing happening all over the Arab world, foreign investors don’t like these kinds of tensions and will move their money out if they can. Which is what we are seeing.”
Currency strain and capital outflows
Signs of financial tension were already emerging well before the weekend’s strikes.
Data from the Egyptian Exchange show net foreign outflows of about $1.12 billion from the secondary government debt market during the week leading up to the attacks, a period when Washington had sent an additional aircraft carrier group towards the Arabian Sea and global investors were already repositioning for a conflict.
Those withdrawals pushed the pound back towards 48 to the US dollar by the middle of last week, erasing all the currency’s gains since late 2025.
On Sunday, market participants described continuing outflows, although no official aggregate had yet been published.
Mr Badra, who remains in contact with stock‑exchange sources, told The National that foreign money continued to leave Egyptian markets today in a broad regional sell-off.
Economists are warning that this pressure could intensify if short‑term foreign holdings, also known as “hot money”, begin to retreat in larger volumes. Estimates of foreign investments in Egyptian government debt and treasury bills range between $45 billion and $50 billion.
Analysts note that the set-up is similar to Egypt’s experience in early 2022, when Russia’s invasion of Ukraine spurred capital exit, import inflation, and three consecutive currency devaluations.
Food security, inflation vigilance, and public mood
As energy and foreign‑exchange shocks build, the Egyptian Supply Ministry moved to pre‑empt consumer anxiety, especially as it is Ramadan. It confirmed in a Saturday statement that strategic food reserves remain secure for several months, with state supply chains continuing to unload goods daily.
Responding to worries about profiteering, the ministry confirmed that it intensified its price‑monitoring.
Nonetheless, Egyptians are acutely sensitive to inflation. Any sustained rise in oil or shipping costs will feed directly into consumer prices, while a weaker pound magnifies import bills for wheat, cooking oil, and medicine.
Consequently, Mr Badra described a “tangible” public anxiety.
“The panic people are feeling here is palpable. I think many Egyptians saw the attacks on Abu Dhabi and Saudi Arabia yesterday and were shocked that they were taking place in civilian areas.”
“The people’s worries are absolutely justified. We don’t know much at the present time and there is a definite exhaustion among the populace after so many economic shake‑ups over the past 10 years.”
Tourism and broader sentiment
The crisis is already taking its toll on travel. Flight cancellations and temporary airspace restrictions across the region have hit Egypt at the height of its winter high‑season.
The National also spoke to Mohamed Yassin, the operator of a tourism company at the Giza plateau who described a wave of concern among other tour operators following a series of cancellations they received over the weekend.
Although conceding it is too early to tell, Mr Yassin said that if the conflict becomes drawn out, lost revenue could be considerable.
“This will also undoubtedly affect tourism, already our airports have been disrupted and flights are grounded and mind you, this is a high season for tourism in Egypt so we will lose a lot of money. This always happens to us when wars break out in the region.”
“What usually happens is that you surely lose any tourists who were planning to visit in the next few weeks. But what’s worse is that others will think twice before booking holidays here for the rest of the year. There is nothing for us to do but wait and see how it plays out.”
As officials continue to project calm, the mood on the ground remains uneasy. Measures to secure energy supplies and shore up reserves may steady markets for now, but Egyptians are watching the unfolding conflict with growing apprehension.
“We are also worried here that Iran has got desperate and will hit anyone and anywhere now that the US has cornered it.”
It is a concern that captures a recurring theme for Cairo, where uncertainty far beyond its borders is once again setting the tone for its economy at home.
