Israeli Energy Minister Eli Cohen has halted approval of a landmark US$ 35 billion natural gas deal between Israel and Egypt, citing the need to secure favourable terms for the domestic market and to protect Israeli energy interests. According to his office, Cohen declined to authorise the export contract until “Israeli interests are secured and a fair price for the Israeli market is agreed upon.” The agreement had been hailed as the largest export deal in Israel’s history and would have supplied Egypt with around 130 billion cubic metres (bcm) of gas through to 2040.
The deal in question was announced in August 2025 between Israel’s offshore Leviathan gas field partners (including NewMed Energy) and Egyptian buyers. Under that contract Israel would supply roughly 130 bcm of natural gas to Egypt, with a first phase of around 20 bcm from 2026, and the balance thereafter. Egypt sees the deal as a means to bolster its position as a regional energy hub and to secure long‑term supply at lower cost compared with LNG imports.
The hold‑up has broader strategic implications: the delay reportedly triggered the cancellation of a planned visit by U.S. Energy Secretary Chris Wright to Israel. Israeli officials say U.S. pressure to finalise the deal has mounted, particularly given U.S. backing of the operator Chevron of the Leviathan field. For Egypt, which already imports Israeli gas (estimated at 15‑20% of its consumption) the delay pauses what would have been nearly a tripling of flows and highlights the risk that Israel may prioritise domestic supply amid rising consumption.
The stalling of the deal signals a cautionary tale: even with a signed contract and major reserves (Leviathan is estimated at 600 bcm), domestic policy, pricing disputes and geopolitics can block monetisation. For Israel, the insistence on protecting local market pricing underscores risk of over exporting ahead of domestic demand. Analysts had already flagged warnings from Israel’s Finance Ministry that domestic gas supplies could become tight in the next 25 years. For Egypt’s energy‑financing ecosystem, the delay may affect downstream liquefaction and re‑export strategies linked to the original deal.
