A Puppet of the Israeli Occupation? What Did Egypt Lose in the $35 Billion Deal?

After being taken “hostage” by Ethiopia’s “water valve” following the construction of its massive dam, Egypt has now also found itself held “hostage” to a “gas valve” after signing a controversial agreement with the Israeli Occupation under which it will pay $35 billion through 2040.

This leaves the country captive to two levers of control: water in the south and gas in the north.

The deal, signed by Egypt and “Israel” on August 7, 2025, deepens Cairo’s dependence on “Israeli gas” stolen from the Palestinian people. The 2018 agreement was worth $15 billion, while the new deal amounts to $35 billion.

As a result, Egypt will remain bound to “Israeli Occupation gas” until 2040, while the arrangement channels $35 billion into “Israel’s” treasury, making its economy the biggest winner after suffering from the impact of wars on Gaza, Lebanon, and Iran.

A Losing Deal

Under the contract, around 130 billion cubic meters of “Israeli Occupation gas” are to be exported to Egypt through 2040, compared with about 64 billion cubic meters agreed upon in 2018.

According to a statement from the Israeli company, under the agreement signed with Egypt’s Ocean Energy, 20 billion cubic meters will be exported once the amendment takes effect, starting in early 2026 in the first phase.

The second phase will see 110 billion cubic meters exported to Egypt, but this stage depends on infrastructure work expected to be completed in 2029.

In the 2018 deal, Egypt’s Dolphinus Holdings paid  $15 billion for roughly 64 billion cubic meters of “Israeli Occupation gas” over 10 years to Delek and Noble Energy, owners of the Tamar and Leviathan fields in the Israeli Occupation.

Notably, under the new deal’s terms, Egypt will pay a higher, unspecified price, which Mada Masr estimated at an increase of up to 14.8 percent.

Among Egypt’s losses in this agreement is the removal of a key clause that allowed the country to reduce imports from “Israel” if Brent crude prices fell below 50 dollars a barrel.

This means Egypt will remain obliged to pay the full value of the deal at current prices, even if future prices drop or the country’s gas needs decline.

According to the text of the agreement, it relies on a “take or pay” formula, a common clause in energy contracts that requires the importer to pay for the agreed annual gas quantities whether it actually receives them or not, due to falling demand or prices.

The clause is designed to guarantee “Israel” a steady and reliable income regardless of market changes or Egypt’s actual need for the imported gas.

In past years, Egypt imported Israeli stolen gas at prices ranging between 5.5 and 7 dollars per million British thermal units.

“Israel” had pushed for an increase to more than 8 dollars per million BTUs at a time when the market price was between 4 and 5 dollars, using its war on Gaza and the suspension of gas exports to Egypt to pressure for higher prices.

At the time, the price for a million BTUs of Israeli stolen gas to Egypt was about 6.70 dollars, yet “Israel” demanded a 25 percent increase.

Egypt in a Bind

Egyptian experts almost unanimously agree on the dangers of the deal, warning that increasing reliance on Israeli stolen gas through 2040 will make Egypt dependent on it and could turn it into an “economic weapon” that Tel Aviv may wield in the future.

They point out that this mirrors Egypt’s own attempt, back when it was exporting gas to “Israel” before production collapsed, to use it as leverage against the Israeli Occupation state.

Experts expressed astonishment at the head of the Egyptian regime Abdel Fattah el-Sisi’s willingness to sign a long-term deal with “Israel,” considered a “strategic enemy,” and at such an unusual moment, given the tense relations caused by the Gaza genocide and Sisi’s own criticism of “Israel.”

The $35 billion deal was signed on the very day the Israeli Occupation announced plans to take over Gaza and push Palestinians south toward the Egyptian border, while Sisi described “Israel’s conduct” as genocide.

Economist Abd al-Hafiz al-Sawi argues that “Israeli gas” should not be treated as an ordinary commodity but as a strategic matter, since Tel Aviv could at any time use it as a political tool to pressure Egypt. He warns that linking Egypt’s national security to “Israeli energy sources” is dangerous.

In a statement to Al-Estiklal, he cautioned that any threats to “Israeli gas” production platforms, as happened during the wars on Gaza, Lebanon, and Iran, would directly harm Egypt, noting that “Israel” has cut off gas to Egypt three times since Operation al-Aqsa Flood on October 7, 2023.

“Egypt has handed over one of its most important economic tools [energy] to an adversary and enemy, opening the door for enormous profits that fund hostile policies, while Egypt itself struggles to meet its own energy needs,” the economist said.

“The deal will place Cairo in a weak negotiating position because Tel Aviv could use energy as a political card, strangling Egypt economically and politically during any future political crisis or military escalation.”

Aliaa Elmahdy, an economist and former dean of the Faculty of Economics and Political Science at Cairo University, also described the latest gas export agreement as having “placed Egypt’s neck in Israel’s hands,” making the country “hostage to Israel.”

In a Facebook post, she wrote that while Egypt’s gas export deal with “Israel” before the 2011 revolution was meant to put “Israel’s” neck in Egypt’s hands, today it is Egypt’s neck in “Israel’s” hands. She expressed astonishment that the contract contained no clear terms and was never brought before parliament.

She asked why no deal was made with Qatar, Libya, Algeria, or Russia, all of which produce abundant natural gas, instead of with the Israeli enemy, with whom Egypt’s relations are in a constant state of push and pull.

Massive Losses

Economic analyst Mostafa Abdelsalam warns that the deal traps Egypt in dependence on “Israeli gas” in a way that directly threatens its national and economic security, placing the fate of the Egyptian economy and its people under the knife of the Israeli Occupation.

He explained that it would tie Egypt’s economic, industrial, and electricity capabilities and activities to the flow of gas from the Israeli Occupation and “its fields” in the eastern Mediterranean, making economic normalization a reality on the ground.

Writing on his Facebook page, Abdel Salam argued that the deal means “the gas file has become one of Israel’s pressure cards on Egypt’s decision-making circles” and that “the switch for hundreds of Egypt’s largest factories, power generation companies, and street lighting could later be controlled from Tel Aviv rather than Cairo.”

He warned that “Israel” could use this agreement to interfere in Egypt’s economy, affect the stability of the Egyptian pound, and manipulate the foreign exchange market.

Egyptian experts caution against tying the domestic market, including power plants, fertilizer and cement factories, and other strategic industries, to imports of natural gas from “Israel,” as it would threaten Egypt’s national security if the Israeli Occupation cuts gas supplies in the future for any reason.

Although “Israel’s gas fields” are obligated under previous agreements to supply about 4.5 billion cubic meters of gas to Egypt annually, the new deal is expected to raise this to 5.6 billion cubic meters per year.

“Israel” has nonetheless cut supplies multiple times since its war of extermination in Gaza began in 2023, most recently in June 2025 during the 12-day Israeli war on Iran.

A Gift to ‘Israel’

Experts view this deal as “catastrophic by all measures,” marking a dangerous strategic shift in Egypt’s national security. They believe it strips Egypt of that security and places it at the mercy of the Israeli Occupation, effectively serving as a “gift” to “Israel.”

Political science professor Mustapha el-Sayed described the gas agreement as “a political, financial, and strategic gift to the Israeli enemy.”

He said Egypt has effectively handed the Israeli Occupation a check worth $35 billion “to finance its brutal war on the Palestinian people in Gaza and the West Bank.”

El-Sayed called for canceling the deal, arguing that it “brings us the gravest harm morally, politically, and strategically, because it is not wise to hand over your gas supply security to an enemy that is fighting on your borders and violating agreements signed with you.”

In addition to being a disastrous loss for Egypt in security, economic, and political terms, other experts and analysts view the deal as a betrayal of the Palestinian people, who are being slaughtered in Gaza, noting that it was announced on the very day Netanyahu unveiled his plan to occupy Gaza.

They call it “a gas deal stained with the blood of the innocent” and “a deal sealed with the blood of martyrs,” saying it extends a hand of economic normalization to the Israeli Occupation as if rewarding it for two years of burning and annihilating Gaza, and encouraging it to continue spilling the blood of Gaza’s people without end.

A source familiar with the deal told the pro-government outlet Cairo 24 on August 8, 2025, as well as pro-regime online networks, that the deal was not new but rather an old one that had simply been extended.

In response to claims pushed by these networks that Egypt would save billions of dollars by importing cheap gas from “Israel,” former MP and energy economics expert Mohamed Fouad said this would not happen.

“Egypt relies on domestic gas for 54 percent of its needs, or 3.9 billion cubic feet per day, liquefied natural gas for 31 percent, or 2.2 billion cubic feet per day, and pipeline gas from Israel for 15 percent, or 1.1 billion cubic feet per day,” he said on X.

This means pipeline gas from “Israel” is cheaper than liquefied gas, but it will not bring economic savings unless it replaces existing quantities of liquefied gas. In Egypt’s case, there are no alternative LNG volumes being substituted under the agreement. As a result, the financial impact of the deal will not materialize, and the NewMed agreement will not save Egypt any money. It will merely secure a long-term supply of pipeline gas, covering a large share of it, but it will not alter the economic equation or benefit Egypt in its overall gas balance.

Israeli Occupation Gains

Israeli Energy Minister Eli Cohen was the first to highlight what the Israeli Occupation stood to gain from what he called the largest gas deal in history, describing it as important news on the security, political and economic fronts.

He called it fantastic news for the Israeli economy that would bring billions of dollars into state coffers.

Cohen stressed that the deal “cements our status as a leading regional power in energy, one that our neighbors rely on and need,” adding that “the natural gas economy is one of the strategic assets of the State of Israel.”

After the signing of the agreement, Yossi Abu, the CEO of the Israeli company NewMed, spoke to the Israeli newspaper Globes on August 8, 2025, asserting that gas serves as an anchor for creating normalization with Arab countries, and “that is our target.”

He added that the deal would bring “a lot of money to Israeli citizens” and to the state treasury, as NewMed pays millions of dollars to the Ministry of Finance in the form of revenues, fees, and taxes that go directly to the Israeli people.

He explained that the company paid 205 million shekels in various revenues, fees, and taxes in the second quarter of 2025, bringing the total amount contributed to the state treasury since the beginning of the year to 428 million shekels.

This was also confirmed by The Times of Israel on August 7, 2025, which predicted that the deal would “funnel hundreds of millions of shekels in revenues from gas royalties and taxes to the country’s state coffers.”

The newspaper added that the deal would almost triple the annual volume of natural gas supplied from the Leviathan offshore field to Egypt and boost the state’s revenue from its proceeds.

“This is the most strategically important export deal to ever occur in the eastern Mediterranean, and strengthens Egypt’s position as the most significant hub in the region,” said Abu. 

“This deal, made possible by our strong regional partnerships, will unlock further regional export opportunities, once again proving that natural gas and the wider energy industry can be an anchor for collaboration.”

Network of Interests

Immediately after the announcement, political analysts launched a fierce attack on the deal, describing it as a threat to Egypt’s national security, both politically and economically. The concern was not only that it ties Egypt’s decision-making to the Israeli Occupation, giving Tel Aviv leverage over Cairo through the threat of cutting off an energy lifeline, but also that the deal has no rational economic or political justification. Instead, it is a business arrangement that benefits, aside from “Israel,” companies loyal to the head of the Egyptian regime, Abdel Fattah el-Sisi.

The thirty-five billion dollar deal appears to disregard Egypt’s political and economic assessments, clashing with national interests and undermining the concept of national security. Analysts suggested that its primary aim is to serve the private interests of Sisi’s allies.

An Egyptian politician linked the deal to a network of private companies involved in importing gas for profit. These companies, he said, are closely connected to the regime and their inner circles, and their corruption threatens Egypt’s political, economic, and security interests.

Speaking on condition of anonymity for security reasons, the politician drew a connection between this agreement and a previous investigative report by journalist and human rights activist Hossam Bahgat on October 21, 2018, titled “Who Buys Israel’s Gas? A Company Owned by Egyptian Intelligence.”

He explained that at the time, when the first agreement was signed to import sixty-four billion cubic meters of gas from “Israel” for fifteen billion dollars in 2018, the importing company was reported to be a private firm, East Mediterranean Gas (EMG), which was revealed to be owned by the Egyptian General Intelligence Service, alongside a company called Dolphinus.

Now, an Egyptian company named Blue Ocean, affiliated with Dolphinus, which had partnered with East Mediterranean Gas in the 2018 deal, is executing the new agreement in 2025.

The politician voiced his surprise at this arrangement, noting that it does not serve Egypt’s interests. Previously, when Egypt exported gas to “Israel,” the transactions were also handled through a company affiliated with the intelligence service. At the time, the goal was reportedly to link “Israel’s” economy to Egypt for strategic security purposes. The current arrangement, he said, has reversed the advantage in favor of the Israeli Occupation.

He suggested that some form of deviation for profit may lie behind the latest deal, operating away from the interests of Egypt and the intelligence service, which, he said, is fully aware of the risks posed by the agreement.

An investigative report by Mada Masr on October 21, 2018, which sought to uncover who would handle the import of “Israeli gas,” revealed the involvement of Sisi’s intelligence apparatus under its former head, Abbas Kamel, and a company owned by the intelligence service in purchasing “Israeli gas.”

Documents showed that East Mediterranean Gas, the main beneficiary of importing “Israeli gas” and reselling it to the Egyptian state, is a private company. However, the majority of its shares are owned by the Egyptian intelligence service, which collects eighty percent of its profits.

In order to finalize the deal, the identities of the true Egyptian players and beneficiaries were concealed, shielding them from taxes and any potential legal accountability.

The report further revealed that East Mediterranean Gas, along with affiliated businessmen, profits in three distinct ways from the gas deal with “Israel”: first, from transporting the gas from “Israel” to Egypt through a pipeline in which the company holds a stake; second, from reselling the gas to the Egyptian government with a profit margin added; third, from any deals to transport additional “Israeli gas” from Jordan to Egypt and resell it to the government, earning a profit margin after collecting transportation fees through the Aqaba-Arish pipeline, which the company owns.

This is why these companies and businessmen closely linked to the intelligence service insist on importing gas from the Israeli Occupation.