Egypt scrambles for fuel supplies as Israel-Iran conflict cuts gas flow

Business Insider

6 hours ago

Egypt is racing to secure alternative fuel supplies in a bid to prevent power outages after tensions between Iran and Israel disrupted natural gas flows.
Egypt is seeking alternative fuel sources to mitigate power outages due to regional political tensions affecting gas supplies.
A tender for importing up to one million tons of fuel oil is set to be launched with deliveries expected in August.
The regional conflict between Iran and Israel has escalated, impacting energy infrastructures and exports.
Egypt is racing to secure alternative fuel supplies in a bid to prevent power outages after tensions between Iran and Israel disrupted natural gas flows.
According to sources familiar with the matter, the government is expected to launch a tender this month to import up to one million tons of fuel oil, with deliveries scheduled for August.
This move follows a recent tender and is aimed at shoring up fuel reserves for power generation amid growing concerns over regional conflict, Bloomberg reported.
Israeli and Iranian military strikes have intensified for the third consecutive day. Israel carried out a wave of bombings deep inside Iran, targeting military, nuclear, and energy sites in cities such as Tehran, Natanz, and Isfahan.
In retaliation, Iran launched more than 200 ballistic missiles and drones at Israel under a campaign it has dubbed Operation True Promise III, marking a significant escalation in the ongoing conflict.
On Friday, Israel shut down two of its gas-producing facilities, including Leviathan, its largest field, due to security risks following its strikes on Iran. In response, Tehran has vowed to retaliate. The shutdown has significantly reduced gas exports to Egypt, which relies heavily on imports to meet its energy needs.
'We are working hard to keep our promise to avoid any blackouts, but of course what happened yesterday has its direct consequences on a large part of gas supplies needed for power stations,' Egypt's Prime Minister Mostafa Madbouly said.
Authorities prioritise power amid industry fuel cuts
To manage the shortfall, Egyptian authorities have already cut gas supplies to several energy-intensive industries, prioritising electricity generation to avoid widespread outages.
Still, a prolonged disruption in Israeli gas exports poses a serious threat to Egypt's power grid. President Abdel-Fattah El-Sisi's administration is keen to avoid a repeat of previous summers when surging demand led to nationwide blackouts and fueled public frustration in a country already battling high inflation.
In addition to cutting gas supplies, the Egyptian government on Saturday suspended fuel oil and diesel deliveries to certain industries for two weeks.
Egypt is currently facing a daily gas shortfall of around 3.5 billion cubic meters. Israeli gas exports had been helping to bridge that gap, contributing between 800 million and 1 billion cubic meters per day, one source added.
Stock market nosedives
Meanwhile, Egypt's banking sector has taken a significant hit, further compounding the country's already fragile economic situation.
On Friday, the EGX 30, Egypt's main stock index, posted its worst performance in five years, plunging as much as 7.7% on the first trading day since the conflict erupted.