Geopolitically, Egypt has found itself in an increasingly difficult position in recent years as it attempts to maintain relations with both Russia and the West.
As the EU looks to secure non-Russian natural gas for the future, Egypt has the potential to play an increasingly important role as a supplier of LNG.
Even if Egypt overcomes the geopolitical difficulties involved, there are several bottlenecks that mean it won’t be able to boost output significantly in the short term.For years, Egypt has been performing a tough balancing act between the West and Russia, with Cairo casting itself as an actor that both parties can lean on. Egypt was the Soviet Union's principal ally in the Middle East during the Cold War and remains an important partner today.
But Egypt also maintains strong energy ties with the West, a relationship that has become more entrenched during the global energy crisis. Back in June, Egypt, the European Union, and Israelto boost natural gas exports to Europe, with the framework hailed as the first to allow Israel to export"significant" amounts of gas to Europe. And now the parties are looking to extend the deal that will maintain"relatively high volumes" of LNG deliveries to Europe.
They are there prepared for the time when we make the decision to increase their capacity to double or tripleUnfortunately, rising domestic demand as well as infrastructure constraints limit Egypt’s ability to quickly ramp up output. Egypt has been juggling with competing interests, trying to supply more gas to its domestic market but also attempting to increase exports in a bid to ease an acute dollar shortage.
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