The Gulf Crisis Through Egypt’s Eyes

• Commentary Middle East and North Africa · Transatlantic Relations
  by Beatrice Pistola
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As tensions between Iran and the United States and Israel escalate into open conflict, the Middle East once again finds itself in the midst a wider regional crisis. What began as coordinated strikes by Washington and Tel Aviv against Iranian targets has quickly spread across the Gulf, drawing in regional actors and raising fears of broader destabilisation. For Egypt, watching events unfold from Cairo, the crisis is not only about military escalation - it is about the security of Arab states, the stability of regional markets and the preservation of a fragile geopolitical balance.

Egypt's response has been cautious but deliberate. While Cairo has expressed concern over the expanding conflict - avoiding mention of the initial US-Israeli operation -, it has also strongly condemned attacks targeting Gulf states. Egypt's measured response reflects the different pressures shaping its foreign policy: a strategic alliance with the United States, close economic and political ties with Gulf partners such as Saudi Arabia and the United Arab Emirates, an uneasy peace with Israel and a careful but historically pragmatic relationship with Iran.

In his speech at the Armed Forces' annual Iftar, President Abdel Fattah el-Sisi reaffirmed Egypt's full support for the Gulf countries, stating that Iran's actions represented a breach of Arab states' sovereignty, while adding that Egypt had taken all necessary precautions and expressing confidence that the country would remain protected.

Economic reverberations

For Egypt, the economic consequences of the conflict could be significant. President Abdel Fattah el-Sisi has warned that the escalation is already disrupting global energy markets, particularly as tensions threaten shipping through the Strait of Hormuz, one of the world's most important oil transit routes. Disruptions to maritime traffic through the strait - which carries roughly a fifth of global oil supplies - have contributed to rising energy prices in recent days. Higher oil prices increase the cost of imports for Egypt and place additional pressure on an economy that had only recently begun to stabilise after a series of regional and economic shocks. Rising energy costs could also strain public finances and complicate efforts to stabilise the economy.

The crisis has already begun to affect Egypt's key economic sectors. Declining shipping activity linked to regional instability has reduced traffic through the Suez Canal, one of Egypt's most important sources of foreign currency revenue. At the same time, the suspension of Israeli natural gas exports from the Tamar and Leviathan fields after US-Israel strikes on Iran has added further pressure to Egypt's energy system. Cairo had already begun importing liquefied natural gas through floating storage and regasification units to meet rising domestic demand and reduce the risk of electricity shortages. The disruption has nevertheless complicated supply planning and has also forced Egypt to suspend gas flows to Lebanon and Syria through the Arab Gas Pipeline in order to prioritise domestic supply. Analysts warn that reduced canal revenues, higher energy costs and broader regional uncertainty could further weigh on Egypt's fragile economic recovery if the conflict continues. Such pressures could complicate the government's economic reform efforts under its programme with the International Monetary Fund, which is scheduled to run until the end of 2026.

The tourism sector, another crucial pillar of Egypt's economy - contributing to 8-8.5% of the country's GDP -, could also face renewed pressure if regional insecurity intensifies. Egypt welcomed around 19 million tourists in 2025, marking a record year for the sector and a sharp increase in visitor numbers. Tourism revenues have become an important driver of foreign currency inflows and economic growth, making the sector particularly sensitive to regional instability that could discourage travel to the Middle East.

At the same time, Egypt's economic ties with the Gulf mean that instability in the region carries direct domestic implications. Millions of Egyptians live and work across Gulf states, including around 1.5 million in Saudi Arabia, hundreds of thousands in the United Arab Emirates and more than 600,000 in Kuwait. The remittances sent home by these workers represent one of Egypt's most important sources of foreign currency, reaching $37.5 billion in 2025. Disruptions to travel and airspace across the region have already begun to affect mobility between Gulf countries, with Egyptian authorities coordinating with Saudi officials to allow Egyptians arriving by land from neighbouring Gulf states to obtain emergency entry visas in order to depart from Saudi airports and return home. Should the conflict escalate further, it could also affect Gulf economies themselves, potentially limiting the financial support and investment that countries such as Saudi Arabia and the United Arab Emirates have provided to help stabilise Egypt's economy in recent years.

Diplomatic consequences

Egypt has long tried to position itself as a stabilising force within the Arab world and has stressed the importance of 'a unified Arab position to safeguard regional stability and protect Arab interests'. Historically, Cairo has played mediator in numerous regional disputes, leveraging its diplomatic weight and geographic position to encourage dialogue and de-escalation. From negotiations between Palestinian factions and Israel to broader Arab diplomatic coordination, Egypt has frequently presented itself as a central broker capable of bridging divides within the region, hosting key diplomatic initiatives such as the Sharm el-Sheikh Memorandum.

The current war, however, places that role under significant pressure. As tensions spread across the Gulf, Egypt finds itself compelled to balance its traditional diplomatic posture with the need to stand firmly alongside its closest Arab partners. Countries such as Saudi Arabia, the United Arab Emirates and Kuwait have become increasingly important to Egypt over the past decade, providing financial assistance, investment and political backing during periods of economic and political strain. Egypt and several Gulf states share concerns over regional instability, maritime security and the potential expansion of Iranian influence across the Middle East. As a result, Cairo has increasingly aligned itself with Gulf positions on key regional issues, reflecting not only shared security concerns but also the growing economic and political importance of Gulf partnerships for Egypt.

At the same time, Egypt's diplomatic calculations are also influenced by its strategic partnership with the United States and its more cautious relationship with Iran. Cairo has maintained a strategic partnership with Washington since the late 1970s, centred on military cooperation, security coordination and economic assistance, making the United States a key pillar of Egypt's external relations. Conversely, Egypt's ties with Iran have remained limited since the rupture in relations following the 1979 Iranian Revolution and Egypt's peace treaty with Israel, as well as Cairo's decision to grant asylum to the deposed Shah of Iran, though channels of communication have occasionally reopened in recent years. These dynamics place Egypt in a complex position in the current crisis - aligning politically with its Gulf partners and maintaining cooperation with Washington while avoiding direct confrontation with Tehran and continuing to emphasise regional de-escalation.