Egypt and Israel,Tensions over natural gas supplies

When asked to describe Egyptian-Israeli economic relations in early 2015, head of the Foreign Trade Administration in the Israeli Economy Ministry Ohad Cohen assured that they were “stronger than ever.”

2015 is however ending with renewed tensions concerning gas dealings between Cairo and Jerusalem, with the looming appeal of a Swiss court’s decision that the Egyptian General Petroleum Company (EGPC) pay $1.7bn to Israeli companies as compensation for the shortfall in natural gas supplies.

These tensions mark a divergence from the post-1979 period of peaceful relations and economic exchange between the bordering countries, a period following the Egypt-Israel Peace Treaty that allowed Israel to purchase oil from Egypt

However, the more recent history of Egypt-Israel resource exchange has been subject to turmoil. Immediately following the 25 January Revolution in 2011, pipelines transferring natural gas from Egypt to Israel were repeatedly targeted by militants. Egypt’s revolutionary climate and its political vacillations resulted in the cessation of natural gas exports to Israel in 2012, ending a 20-year agreement between the two parties and prompting Israeli firms to turn to international arbitration to seek compensation.