In response to Iranian threats against Saudi Arabia, Egypt has taken steps to defend this country in order to protect its own economic and security interests. Saudi Arabia is recognized as one of the vulnerable countries in the U.S.-Iran war, and Iran has now explicitly declared Saudi oil facilities, data centers, and underwater communication cables as its next targets.
Military Plans and Economic Challenges
According to reports, the United States and Israel are planning a short and intensive air campaign after the upcoming Israeli elections, which will include targeting nuclear sites, missile facilities, and energy infrastructure. Meanwhile, Saudi Arabia is currently facing numerous challenges, including missile and drone attacks from the Houthis on its energy infrastructure.
Egypt, which cannot overlook Saudi financial aid due to its economic dependence on the kingdom, has provided defensive support. A $5.3 billion loan from Saudi Arabia to the Central Bank of Egypt is due this month, and Houthi attacks on ships have imposed heavy costs on the Suez Canal.
Consequences of War and Rising Costs
The war between the United States and Iran has brought significant economic costs to Egypt. The reduction of gas exports from Israel to Egypt due to the onset of war has forced the country to purchase replacement liquefied natural gas (LNG). Egypt's energy import costs rose to $2.5 billion in March, and the International Monetary Fund estimates the additional costs between March and June to be around $3.5 billion.
Foreign investors have fled due to the insecure conditions, withdrawing $17 billion from Egypt's treasury debts in just seven weeks. This situation has led to a 17% depreciation of the Egyptian pound and an increase in inflation rates above 15%. With oil prices rising above $100, Cairo has raised fuel prices by up to 30% and issued an order to close stores by 9 PM to conserve electricity.
Abdel Fattah el-Sisi, the President of Egypt, has requested parliament to allow him to respond to any defensive request from Saudi Arabia. A parliamentary vote on this matter will be held on October 26, and Sisi's supporting parties are likely to achieve a two-thirds majority for approval.
Although Cairo has not specified how many troops will be sent to Saudi Arabia, it has emphasized that it will not enter Yemen. This situation makes Egypt a direct target for the Houthis and Iran through the Houthis, but it appears that there is a backup channel with Iran that has led to the promise of not entering Yemen.
Egypt's gas system, especially under current conditions, cannot withstand a blow. Domestic gas production is continuously declining, and Egypt has reverted to LNG imports. In late July, a drone attack on the regasification ship Energos Winter in Damietta and a fire on another LNG ship destroyed one-tenth of Egypt's import capacity.
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