Israel approves natural gas export deal with Egypt

Israel’s approval of a major natural gas export agreement with Egypt marks a significant milestone in regional energy cooperation and economic diplomacy.

Described by Prime Minister Benjamin Netanyahu as the largest gas deal in Israel’s history, the agreement reflects shifting energy dynamics in the Eastern Mediterranean and highlights how strategic resources are increasingly shaping political and economic relations in the region.

Details of the historic agreement

The deal, valued at approximately $35 billion, was signed in August 2025 between Israel and a consortium led by US energy giant Chevron, alongside Israeli partners NewMed and Ratio. It involves the export of natural gas from the Leviathan field, located off Israel’s Mediterranean coast, to Egypt over a period extending to 2040 or until contractual volumes are fulfilled.

According to official statements, the agreement covers the supply of around 130 billion cubic meters of gas. Netanyahu confirmed that the deal amounts to 112 billion shekels, with nearly half of the proceeds expected to flow into Israel’s state treasury. He emphasized that the revenues would support public priorities such as education, healthcare, infrastructure, and national security.

Chevron welcomed Israel’s decision to issue the long-awaited export permit, which had delayed final investment decisions related to expanding the Leviathan field. The approval removes a major regulatory obstacle and provides long-term certainty for investors and partners involved in the project.

Economic and regional implications

For Egypt, the agreement is expected to ease mounting energy pressures. Egyptian gas production has declined since 2022, forcing Cairo to abandon ambitions of becoming a regional gas hub and to spend heavily on liquefied natural gas imports. Israeli gas supplies are seen as a practical solution to bridge the gap between domestic production and rising demand.

From Israel’s perspective, the deal strengthens its position as a regional energy supplier and deepens economic ties with a key Arab neighbor. Netanyahu described the agreement as a contribution to regional stability, arguing that shared economic interests can reinforce cooperation even amid political tensions.

The timing is also notable given the strained relations between Israel and Egypt during the prolonged war in Gaza. While Egypt has played a central mediating role and has been critical of Israel’s military campaign, the gas deal suggests that strategic cooperation has endured despite diplomatic friction.

Political hurdles and international dimensions

The agreement was not without controversy inside Israel.

Energy Minister Eli Cohen had previously delayed approval, arguing that earlier terms were unfavorable. His stance reportedly caused diplomatic unease, including the cancellation of a planned visit by a senior US energy official. Cohen ultimately endorsed the final version of the deal, standing alongside Netanyahu during its announcement.

The deal also underscores the role of the United States, both through Chevron’s involvement and Washington’s broader interest in stabilizing energy markets and alliances in the region.

Alas, Israel’s approval of the $35 billion gas export deal with Egypt represents more than a commercial transaction. It signals a strategic convergence of energy needs, economic interests, and geopolitical calculations at a time of regional uncertainty. While political tensions remain unresolved, the agreement illustrates how natural gas has become a key tool for influence and cooperation in the Eastern Mediterranean, with long-term consequences for both countries and the wider region.