EGYPT Impact of Oil, Gas and Suez Disruption

• Replacing Israeli gas via LNG would cost Egypt ~0.08% of annual GDP per month

• Higher oil prices mainly hurt via refined imports, adding ~0.02% of annual GDP monthly in costs

• Risk of a persistent regional and oil premium

  
  

Egypt has long been an important actor in the regional energy network. However, in recent years, amid economic recovery and declining gas production, Egypt has become a net importer of gas. The country has also long been a net importer of refined oil products. In this paper, we explore Egypt’s sensitivity to an energy supply and price shock stemming from the Iran conflict.

We estimate that the replacement cost of Israeli gas supply would amount to approximately 0.08% of GDP per month of interruption at current elevated LNG prices.

Regarding oil, although Egypt maintains domestic production, it remains a significant importer of refined products. We estimate the impact of a sustained oil price increase at approximately 0.02–0.03% of GDP per month, depending on the average oil price and refined product price dynamics.

Finally, Suez Canal receipts could be negatively impacted by approximately 0.2% of GDP in the event of prolonged disruption, particularly as traffic levels remain well below their 2023 peak.