Adel Kamel
ORIENT XXI / April 15, 2026
Ever since Israel and the USA attacked Iran on 28 February 2026, Cairo has been trying to play mediator in order to end the war, while at the same time condemning Iran’s bombardment of its Arab “brothers”. Meanwhile, the war is having a major impact on its economy and might lead to a realignment of the country’s alliances.
Ever since Israel and the USA attacked Iran on 28 February 2026, Cairo has been trying to play mediator in order to end the war, while at the same time condemning Iran’s bombardment of its Arab “brothers”. Meanwhile, the war is having a major impact on its economy and might lead to a realignment of the country’s alliances.
At the end of Ramadan, Cairo is even less sleepy than usual. The mesahharati, the drummers who herald the sahour1, are making their usual racket by the café terraces to collect their due at the approach of the Eid al-Fitr. As the saying goes, even as an advertising slogan : Ramadan fi Masr, di haga tania (“Ramadan in Egypt is really something else”). It’s especially true when it comes to liveliness and generosity, above all a few minutes before the end of fasting, when drivers speed up and the roads are lined with people handing out packs of dates and bottles of water. This year, however, that “something else” is even more pronounced, so striking are the consequences of the Israeli-American onslaught on Iran unleashed on 28 February.
Reassuring the backers
As Egypt has no US military bases on its soil, it has been spared the Iranian riposte. Diplomatically, the authorities have from the outset condemned Iran’s strikes on its neighbours, without mentioning the US-Israeli aggression. In addition to making many phone calls, Foreign Minister Badr Abdelatty toured the region in the middle of March, visiting Qatar, the United Arab Emirates (UAE), Oman, Jordan and Saudi Arabia, while President Abdel Fattah al-Sissi went to the UAE and Qatar, then to Bahrain and Saudi Arabia.
The main idea was to make a show of supporting Egypt’s Arab “brothers”, who are also the country’s main financial backers, sometimes in exchange for bits of national territory. Along the constantly proliferating highways, giant billboards advertising luxury goods and financial investments seem to jeer at the majority of the population. Such is the case of those seen for Ras el-Hikma. This bit of the Sahel – Egypt’s north coast – was sold in 2024 for $35bn to the UAE, which is planning to build a tourist complex there, a free-trade zone with port and airport infrastructure as well as several shopping and residential districts. So it is logical that Cairo should show its support for Abu Dhabi, the territory most targeted by Iran.
This display of fraternity also came after press and social media criticism of the government’s position, deemed too half-hearted and not sufficiently supportive of its Gulf neighbours. The Information Minister has threatened journalists – via some “recommendations” – and “invited” them to heed only official declarations. To quote Amira*, an independent journalist,
”Egypt displays messages of solidarity because it has no alternative, in particular financially. But that is mainly on the surface. There may well be ‘off-screen’ messages of support for Iran”.
Indeed, the relations between the two countries became slightly warmer in 2024 when Iranian President Masoud Pezeshkian visited Cairo. And on 13 March, he had a phone conversation with President Sissi who was trying to act as mediator in the current war. Like other political actors, Egypt does not look askance at the existence of a counter-force of regional influence against Israel and also Saudi Arabia and Turkey, even if it cannot say so publicly.
Economic slowdown
The impact of the war is above all economic. On the macro-economic level, the Egyptian pound fell to a record low of 63EGP to 1 euro as against 56EGP on the eve of the war, increasing the debt burden. This obliged the Central Bank of Egypt to maintain a high base rate, resulting in a slowdown of both consumption and investment. Economic activity has also been hurt by the decline of tourism (which normally represents 5 % of GDP), especially since the US State Department ordered the departure of its nationals. “I really don’t understand that decision”, Ahmed* admits. He manages a big hotel in the city centre near Tahrir Square. “Tourism had picked up again after 7 October 2023. But now there are cancellations right and left, even for the month of April, generally regarded as high season.” Other sources in exclusively touristic Upper Egyptian cities like Luxor and Aswan bear this out and stress the degree of economic shock, including in the medium term.
Another of the country’s important economic resources is the expatriates’ remittances. These represent 8 % of GDP and come mostly from workers in the Gulf countries. Remittances have of course been impacted by the economic slowdown and the return home of the Egyptians. This return has not always been feasible, with the state-owned Egypt Air accused of charging exorbitant fares. Moreover the activities of Gulf-based consultancies involved in the repatriation of foreign currency have been completely suspended, according to Myriam Raymond, a researcher specialising in the Egyptian labour market.
In 2024, Egypt was on the brink of default and had to resort to emergency funding, in particular from the International Monetary Fund (IMF). “Too big to fail” was the watchword. But the current crisis, which prompted President Sissi to declare a state of “quasi emergency”, continues to destabilise. The IMF and the European Union (EU) disbursed sizeable instalments in January and February 2026, giving the Central Bank a little respite. However the febrility has not gone away: in a conversation between the foreign ministers of Egypt and France, the former suggested that Paris support the rapid payment of another instalment of EU funds.
Rising prices and power cuts
The most significant impact by far concerns the energy sector. On the day it began its offensive against Iran, Israel announced it was stopping its exports of natural gas to Egypt, estimated at 17 % of the country’s domestic consumption. These exports take place chiefly from the Leviathan gas field. They were increased last year with the signing of a $35bn contract for 130bn cubic metres of gas over the next fifteen years. “Cairo’s dependence on Israeli gas is all the greater as it is the gas most compatible with Egyptian pipelines”, we are told by a local source specialising in this sector. “Imports of liquefied natural gas from other providers have therefore increased, in particular from the EU and Russia. But on average they cost 30 % more.”
That increase has been carried over to retail prices: on 3 March, at 3am, Egyptian authorities raised the price of all fuels by between 15 % and 22 %2. The price of underground tickets, the most popular form of transport, was also revised. In an effort to limit the discontent of its 120 million subjects, the government announced that it would not change the price of subsidised bread, and threatened speculators with military tribunals. To guard against the consequences of a return to the frequent power cuts experienced between 2023 and 2024, restrictive measures were decreed –reduced lighting for highways and billboards and, most important of all, a 9pm closing time for restaurants and cafés on weekdays, and 10pm at weekends.
When he heard the news, Ali*, a café manager in the working-class neighbourhood of Mounira, was frantic. “I can’t see that lasting very long,” he reassured himself. “Whether it is actually enforced will depend on the district: the more informal it is, like in Boulaq or Imbaba, the harder it will be to apply it. But it will lead to more fines and corruption, as happened during Covid-19”. There again, the economic consequences will be terrible for the thousands of informal workers in the restaurant sector.
The impact could be even greater in the event of disruptions at the Suez Canal. Revenues from the canal, which was expanded with great fanfare in 2015, make up 7 % of GDP and bring a flow of precious foreign currency. After 7 October 2023, with the Houthis joining the fray with strikes on dozens of freighters, traffic in the canal was reduced by more than half. “For the moment, the Houthis are not involved in this directly, but that might happen any time. They are so to speak a last card in the hands of the Revolutionary Guards,” says the Yemeni journalist Ahad Yaseen. In the Red Sea, logistical rearrangements have already been made to ensure the continued flow of Egyptian exports to the Gulf via the port of Safaga.
Popular support for Iran
Despite all that, most of the people we meet confide that they support or are even delighted by the Iranian riposte to this new surge of Israeli-US imperialism. No one is taken in by the “cold peace” with Israel arranged at the expense of the Egyptian people. To be sure, no Iranian flag has been observed in Cairo, nor any solidarity demonstration, given the level of security repression. But support for Iran remains very evident on the internet, not without a touch of sarcasm.
Prominent personalities and activists, like erstwhile political prisoner Ahmed Douma, have voiced it from the start. On the day of Eid al-Fitr, in the new administrative capital and in the presence of President Sissi, the sermon preached by Sheikh al-Sayed Hussein Abd al-Bari had an unprecedented tone to it, with a mention of the battle of Khaybar3 and major references to Shiism such as Ali and his wife Fatima al-Zahra, daughter of the prophet Mohammed, an explicit allusion to Iranian resistance. This “rejoicing” goes hand in hand with feelings of anger and powerlessness prompted by the Gaza genocide. To absorb this discontent the authorities have recently loosened up a bit with the production of a series for Ramadan, Sohab al-Ard, considered a fairly realistic portrayal of the situation in the Palestinian enclave.
People support Iran because it’s the only country in the region to stand up to Tel Aviv. If it were to fall, Cairo’s turn would be next. The idea of a war with Israel remains rooted in the collective imagination,
says Amira*. Indeed, at the beginning of 2025, tension rose a notch between the two neighbours, with Israel objecting to the reinforcement of Egypt’s military capacities in the Sinai, in violation of the 1978 Camp David agreement. “No one, God willing [the expression was repeated three times] will be able to come near our country,” President Sissi tried to convince his listeners during the armed forces’ annual Iftar banquet.
A recomposition of alliances ?
It goes without saying that in addition to no longer trusting their US ally since the Obama administration abandoned Hosni Mubarak in 2011, the Egyptian authorities now also fear Israeli hegemony in the region. All the more so as above and beyond the regional chaos which is upsetting the Egyptian economy there is the additional threat of alliances contrary to Egyptian interests emerging in the Horn of Africa. Indeed, Cairo objected strongly to Israel’s unilateral recognition of Somaliland, which greatly strengthened its position on the Red Sea. And that had the blessing of Ethiopia, whose Grand Renaissance Dam is perceived in Egypt as a vital threat to its water supply. Cairo could be tempted to explore new regional alliances, as might be suggested by two meetings held in March with Turkey, Saudi Arabia and Pakistan.
However, the present war also provides an opportunity for Egypt to act as mediator, albeit with no results for the moment. It also strengthens the country’s reputation for stability, both internally and externally, and crystallises the regime’s security rhetoric. All this also retrospectively legitimises its exorbitant arms purchases, primarily from France. For fear of “destabilising” Egypt, the demands of international donors relating to reforms or human rights have also automatically diminished, to the detriment of the 60,000 political prisoners and the country’s poorest classes.
“The working classes are the first to suffer from the ups and downs of the economy. Even before this umpteenth crisis they already lacked medical care, food or the ability to travel,” sighs the labour researcher Myriam Raymond. Fifteen years after the January 25th revolution, poverty and hunger continue to rise. More Egyptians leave the continent than any other African nationality despite the extra-territorialisation of the EU’s borders and Cairo’s reinforcement of controls.
Between the chairs of the Porto Café, at the corner of Mohammed Mahmoud Street where dozens of protestors fell in that same revolution, Om Mohammed, over 70, sells handkerchiefs to feed the three grandchildren she is bringing up alone. She’s a “mounadila”, an “activist”, says the journalist Amira*. This year there is no reason to think she might have been able to give them the essential Eid al-Fitr treats: kaak, fessikh and renga.
* Names have been changed for fear of reprisal
Adel Kamel – chercheur indépendant
