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“Israel” has signed a nonbinding memorandum of understanding to export up to 80 billion cubic meters of natural gas from the Tamar field to Egypt in a deal that could be worth about $20 billion. The supply period is set to run from 2031 to 2038, with the possibility of an automatic extension through the end of 2043, according to the Middle East energy, oil and gas publication “MEES,” in its July 24 issue.
The signatories on the deal were Israel’s Isramco Negev 2, the largest shareholder in the Tamar field with a 28.75 percent stake, along with Mubadala Energy Tamar, owned by the Abu Dhabi government and holding 11 percent of the field. Mubadala’s presence gives the deal a regional dimension: cooperation on this file is no longer confined to the Egyptian-Israeli framework, but has expanded to include a network of interests involving Gulf and international companies, including Chevron.
The agreement comes about a year after the deal signed in August 2025, at the height of Israel’s war on the Gaza Strip, which involved the export of about 130 billion cubic meters of gas to Egypt, valued at roughly $35 billion through 2040. At the time, “Tel Aviv” described it as “the largest gas deal in Israel’s history,” according to statements by Israeli Energy Minister Eli Cohen.
Egypt’s growing reliance on Israeli gas cannot be viewed through a purely economic lens. This direction comes at an extremely sensitive moment, coinciding with the pressure Israeli policies are placing on Egypt’s national security to the east and south, the continuing violations in the Gaza Strip, and the disruption of agreements in which Cairo plays a central role in sponsorship and implementation.
The implications of this deal therefore go beyond energy and cost calculations, opening the door to broader political, security and strategic readings.
Details of the proposed agreement
It should be noted at the outset that the planned agreement is nothing more than a nonbinding memorandum of understanding, meaning it has not yet been signed in final form. However, what the energy publication MEES has reported reveals precise details suggesting that it is in its final stages and awaiting official final signature by the parties concerned.
This expected deal would be the third under a long-term agreement to export Tamar gas to Egypt. The first was signed in February 2018 to supply 32 billion cubic meters at an estimated value of $7.5 billion, then amended in October 2019, reducing the volume to 25.3 billion cubic meters over 14 and a half years.
The second came in February 2024 to supply an additional 43 billion cubic meters over 10 years, with increased supplies tied to the completion of the Nitzana pipeline, the expansion of the Arab Gas Pipeline route through Jordan, and the offshore pipeline between Ashdod and Ashkelon, which was completed this July.
According to what has been leaked, the current agreement stipulates that Isramco would supply 80 billion cubic meters of gas from the Tamar field starting in 2031 through the end of 2038, with the possibility of an automatic extension through the end of 2043 if the field’s production concession is extended. Supplies would begin in limited annual quantities in 2031, alongside the continuation of previous contracts, then rise as those contracts approach their end.
The magazine notes that the 80 billion cubic meter extension, valued at $20 billion, requires all Tamar field partners to join, since Isramco and Mubadala Energy, the two signatories to the agreement, together own only 39.75 percent of the field’s rights, a share that alone cannot meet the required supply volumes.
According to the disclosure, ownership of the field is divided among Israel’s Isramco at 28.75 percent; Chevron Mediterranean, the Israeli unit of the US-based Chevron group, at 25 percent; Israel’s Tamar Petroleum at 16.75 percent; the UAE’s Mubadala Energy Tamar at 11 percent; Israel’s Tamar Investment 2 at 11 percent; Israel’s Dor Gas Exploration at 4 percent; and Israel’s Union Energy and Systems 2 at 3.5 percent.
MEES estimated the average realized price over the life of the agreement at about $7 per million British thermal units, higher than the roughly $5.5 Egypt paid for gas imported from the Tamar and Leviathan fields in 2025. The agreement also stipulates that the gas price will be set according to a formula linked to Brent crude prices, with a price floor, obliging Egypt to pay for a minimum contracted volume even if it does not receive it in full, under the terms to be set by the final agreement.
The magazine did not specify a likely date for official approval of the deal, while hinting that it could be delayed until after the Israeli parliamentary elections scheduled for next October. At the same time, the Israeli company warned that there are no guarantees the final contract will be signed, its conditions fulfilled, or the projected volumes and revenues realized.
Although MEES did not identify the Egyptian partner in the deal, The Times of Israel said the Egyptian side is Blue Ocean Energy, founded in 2021 with the aim of becoming the main importer of gas from Israel’s Tamar and Leviathan fields under long-term contracts running through 2040. It is the same company that signed the 2025 contract in the midst of the war on Gaza.
Cairo is not learning the lesson
With this potential agreement, Cairo is reaffirming its continuation along the same path it began years ago, one based on deepening reliance on Israeli gas. In 2025, Egypt signed a deal described as the largest in Israel’s history, worth as much as $35 billion through 2040. Today, it is continuing the same approach through a new agreement that could run until 2043, meaning the Egyptian market would remain tied to Israeli gas for roughly 18 consecutive years, from 2025 through 2043.
Notably, Egypt has become the largest importer of Israeli gas, accounting in 2025 for about 75 percent of Israel’s total gas exports, with the remaining share going to Jordan. This reflects the growing scale of Arab dependence on Israeli energy sources at a time when energy globally has become an instrument of influence and a strategic pressure card that can be used in times of crisis.
More controversially, Cairo, on this path, appears not to be drawing sufficient lessons from previous experience. During the war on Gaza, Israel made clear attempts to use gas as a political lever, as the occupation government repeatedly hinted at reducing or halting supplies to Egypt under various pretexts and reassessing existing agreements.
Despite that, Cairo is moving to widen the circle of dependence on Israeli gas, raising questions about the risks of turning the energy file into a future political pressure tool, especially amid ongoing regional tensions and the overlap between security and energy issues.
What does the potential Tamar deal signify?
Talk of such an agreement in this form, with these publicly disclosed details, despite the sensitivity of its timing, confirms that Egyptian-Israeli relations are not, as is often promoted, in a state of genuine tension because of differing views over the war on Gaza and some regional files. Rather, they appear to have moved from a cold peace to a deeper level of economic cooperation, accompanied by a growing degree of Egyptian dependence on Israeli gas.
The potential deal suggests that the common ground between Cairo and “Tel Aviv” at present has become greater than it was in earlier periods, amid continued cooperation on a number of vital files. In addition to gas and energy, these include border security, Sinai arrangements, management of the Rafah crossing, and security coordination in the eastern Mediterranean.
By moving forward with this agreement, Cairo is sending a clear message to Tel Aviv that it is capable of separating political disagreements related to the Gaza file from pragmatic economic interests with “Israel”. This is the equation the Egyptian state has adopted in recent years, not only in its relationship with the occupying entity, but also in managing many of its foreign relations on the basis of mutual interests.
Notably, the announcement of a deal that could generate tens of billions of dollars for the Israeli economy comes at the same time as statements by Egypt’s Foreign Ministry supporting the move by some countries to boycott imports from Israeli settlements. This creates controversy over the gap between the declared political position toward some occupation practices and the growing level of economic cooperation, opening the door to many questions about the nature of this equation, its limits, and at times its ironically striking contradictions.
Egypt and Israel on the scales of pragmatism
Cairo’s rush to deepen reliance on Israeli gas stems from the energy crisis it has faced in recent years, amid declining domestic production and rising consumption rates, which pushed the government toward imports from abroad, making Israeli gas one of the most prominent sources of supply despite the existence of other alternatives that may be less costly politically and strategically.
Rising consumption and declining production are not the only reasons Egypt is knocking on Israel’s gas door. This is also tied to Cairo’s desire to meet its external export commitments and its effort to cement its position as a regional hub for gas trade and liquefaction through its facilities, before re-exporting it to global markets.
Yet this ambition may run up against Israel’s ability to use the gas card from time to time, depending on regional developments and the course of political relations, which could impose significant challenges and obstacles to the continuation of that role.
As for the Israeli side, it is naturally the biggest beneficiary of these deals. They guarantee it a huge and stable market for selling its gas production for decades to come, provide dollar-denominated financial flows for many years, and further bind the Egyptian economy to Israeli energy sources. That dependence could in the future turn into a lever of influence and pressure in Tel Aviv’s hands, giving it greater ability to affect some Egyptian calculations related to regional files.
What does this mean for Gaza?
Such deals, which deepen Egyptian-Israeli cooperation, cannot be read in isolation from their regional and international context, especially as they come at a time when the Gaza Strip is witnessing widespread Israeli violations, a clear breach of the terms of the Sharm el-Sheikh agreement, and continuing Israeli efforts to redraw the map of the region in line with its vision and political agenda.
From this perspective, the proposed agreement may have negative political repercussions, even if indirect, for the future of the Arab-Israeli conflict in general, and for the Palestinian cause and the situation in the Gaza Strip in particular. Perhaps the most prominent of these repercussions is the reduced likelihood of an Egyptian-Israeli rupture, since the intertwining of economic interests through long-term contracts raises the cost of any political escalation and makes the option of a break, or even threatening one, more difficult because of the economic and strategic losses and consequences that could follow.
In addition, such deals give Israel a greater degree of long-term strategic reassurance by guaranteeing a stable market for selling its gas production, securing continued dollar inflows, and strengthening its position as a major energy supplier in the region. From here, the demand to “isolate Israel” turns into a populist slogan with no real presence, at least in the Arab world.
In the same context, announcing these agreements at a time when the suffering of Gaza’s residents is worsening, alongside what Palestinians see as Israel’s evasion of its obligations under the Sharm el-Sheikh agreement and the continuing violations in the West Bank and across the Palestinian territories, may weaken the ability of the agreement’s guarantor states to exert meaningful pressure on “Israel”.
Under this logic, it is difficult to imagine strong pressure being applied to a party with which these states maintain economic partnerships of this scale.
While Palestinians in Gaza pin hopes on the possibility that Arab states might use political and economic pressure cards to push “Israel” to halt violations and abide by the terms of signed agreements, such deals raise fears that the effectiveness of those cards is receding, returning the scene to a more complicated point in which Palestinians find themselves in an open confrontation with limited capabilities, amid the absence of regional pressure capable of changing the course of events.