The Leviathan gas platform (Source: video clip - N12 News, Israel - August 2024)
The Leviathan gas platform (Source: video clip - N12 News, Israel - August 2024)

Israel Freezes $35B Gas Deal With Egypt, Defies U.S. Pressure Over Security & Pricing

Details
The Judean Staff
Finance
Israel Freezes $35 Billion Gas Deal With Egypt, Rebuffs U.S. Pressure, Asserts Energy Sovereignty. A Showdown Over Energy and Independence.

Israel has slammed the brakes on what was meant to be its largest-ever energy export deal, a $35 billion natural gas agreement with Egypt, sending shockwaves through Washington, Cairo, and global energy markets. The move underscores a new Israeli doctrine: national security and fair market value come before appeasing allies, even the United States.

Energy and Infrastructure Minister Eli Cohen made it crystal clear that Israel will not finalize the deal until two critical conditions are met: security guarantees for its offshore gas fields and a fair, competitive price that benefits Israeli citizens.

“As a member of the cabinet, I will not approve the deal before ensuring Israel’s security interests are protected and that a fair and competitive price is guaranteed for Israeli citizens,” Cohen declared on Israeli television.

His words, while measured, carried the weight of defiance. In diplomatic terms, Israel just told both Washington and Cairo: “Our energy, our rules.”

The Deal That Could Redefine the Eastern Mediterranean

The $35 billion agreement, signed in principle this past August, was hailed as a breakthrough, a partnership between Israel’s Leviathan consortium (led by NewMed Energy and U.S. giant Chevron) and Egypt’s natural gas sector. The deal envisioned selling 130 billion cubic meters of Israeli gas to Egypt by 2040, transforming both nations into joint players in the Eastern Mediterranean’s booming energy market.

For Egypt, the gas would help power homes, stabilize the economy, and reinforce its role as the Middle East’s LNG export hub. For Israel, it represented the solidification of energy independence, the transformation from importer to regional energy powerhouse.

Infrastructure plans included an upgraded cross-border pipeline through Nitzana, expanded output from the Leviathan field (which holds roughly 600 billion cubic meters of reserves), and enhanced liquefaction capacity in Egypt’s LNG plants.

But beneath the economic optimism lay the geopolitical tension now surfacing.

Washington’s Pressure Meets Israeli Resolve

The Biden administration, and now the Trump administration’s energy team, have both viewed this deal as a stabilizing pillar in the Eastern Mediterranean, tying Israel, Egypt, and the United States into a mutually beneficial alliance.

U.S. Energy Secretary Chris Wright reportedly pushed for the agreement’s completion before his planned visit to Israel, framing it as a win-win for regional cooperation. When Cohen refused to accelerate the timetable, Wright canceled his six-day trip outright, a diplomatic snub that only highlighted Israel’s growing willingness to push back against American pressure.

Israeli officials, however, were unfazed. “We are not for sale,” a senior government source said bluntly. “Energy security is national security.”

Security and Sovereignty at the Core

Israel’s caution isn’t theoretical. During the 12-day Iran-Israel conflict in June, exports from the Leviathan field were temporarily halted due to the proximity of Iranian proxy threats and missile alerts along the coast. The episode underscored the vulnerability of vital infrastructure, and why Cohen’s insistence on iron-clad security protocols isn’t mere posturing.

The Energy Ministry has since linked every expansion of gas exports to defensive readiness, including maritime patrols, cyber protection for pipeline systems, and coordination with the IDF’s naval command.

The message is simple: Israel’s energy lifeline will never again hang on the goodwill of foreign actors or shifting alliances.

Economic Power Play: Protecting the Shekel and the Citizen

Beyond security, Cohen emphasized pricing fairness and domestic benefit. With Israel already facing inflationary pressures and global gas price volatility, the government insists that no deal will proceed unless it strengthens the shekeland reduces local costs, not just enrich corporate stakeholders.

“This is not only an economic deal,” Cohen said, “it is a strategic and moral one. We must ensure that the Israeli citizen, not foreign shareholders, reaps the reward of our natural wealth.”

Energy as the New Battlefield

This standoff is far more than a bureaucratic delay. It symbolizes Israel’s emergence as a sovereign energy power, unwilling to be a junior partner in its own region. While Washington views the deal as a diplomatic bridge and Egypt sees it as an economic lifeline, Israel views it through a different lens: a matter of survival, deterrence, and independence.

The implications ripple far beyond the gas fields. The Leviathan basin could soon fuel not just homes but the strategic realignment of the Middle East, where Israel’s resources empower it to dictate terms rather than follow them.

As phase one of the project, 20 billion cubic meters by 2026, remains on hold, it’s now clear that the gas deal has become a geopolitical litmus test.

Will the United States and Egypt bow to Israel’s red lines? Or will Israel chart its own energy destiny, regardless of the diplomatic fallout?

Summary: The New Doctrine of Energy Sovereignty

  • Deal Size: $35 billion

  • Parties: Israel’s Leviathan (NewMed Energy & Chevron) ↔ Egyptian Energy Authority

  • Exports: 130 billion cubic meters until 2040

  • Status: Frozen pending Israeli security & pricing conditions

  • U.S. Role: Pressuring completion; trip canceled after refusal

  • Strategic Impact: Redefines Israel’s role as a regional energy hub and independent power

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