Israel’s approval of the $35 billion natural gas export agreement with Egypt was not without internal political turmoil. Energy Minister Eli Cohen, a close ally of Netanyahu, had previously stalled the deal, arguing that the terms were not sufficiently favorable to Israel. His objections over taxation and revenue-sharing arrangements delayed negotiations for months and even prompted U.S. Energy Secretary Chris Wright to cancel a planned visit to Israel. However, Cohen ultimately endorsed the final terms and stood beside Netanyahu during the announcement, signaling that Israel’s concerns had been addressed. His shift from skeptic to supporter proved pivotal in unlocking the agreement’s final approval.

Negotiations for the agreement had been ongoing for months, with political and regulatory hurdles delaying its finalization. Reports indicate that disagreements over taxation, infrastructure, and export quotas contributed to the delay. However, the Israeli government’s approval signals a breakthrough, paving the way for implementation in early 2026. Netanyahu hailed the deal as a “historic achievement” that would strengthen Israel’s economy and deepen strategic ties with Egypt.

Egypt’s role in the agreement is equally significant. By importing Israeli gas, Egypt can maximize the use of its LNG facilities at Idku and Damietta, which have been underutilized in recent years due to domestic supply constraints. The additional volumes from Israel will allow Cairo to expand its exports to Europe, positioning Egypt as a critical energy bridge between the Middle East and Western markets. Egyptian officials have emphasized that the deal enhances regional cooperation and supports their long-term energy strategy.

The financial scale of the agreement is notable. At $35 billion, it represents one of the largest commercial deals ever signed between Israel and Egypt. Analysts suggest that the revenues will bolster Israel’s energy sector, attract further investment in offshore exploration, and provide Egypt with a steady supply of gas to meet both domestic and export needs. The deal also reflects Chevron’s confidence in the Eastern Mediterranean as a stable and profitable energy frontier.

The approval of Israel’s $35 billion natural gas export deal with Egypt could also have ripple effects on the stock market, particularly in energy-related equities. Shares of Chevron, which operates the Leviathan field, may see upward momentum as investors anticipate stronger long-term revenues from expanded exports. Israeli energy companies involved in the project could benefit from heightened investor confidence, while Egypt’s positioning as a regional LNG hub may attract foreign investment into its energy infrastructure. At the same time, broader market impacts may be more muted, as global energy prices are influenced by multiple factors including OPEC decisions, geopolitical tensions, and European demand shifts. Analysts caution that while the deal strengthens fundamentals for companies directly tied to Eastern Mediterranean gas, its effect on global indices will likely be incremental rather than transformative.

Beyond economics, the agreement carries geopolitical weight as Israel and Egypt, who signed a peace treaty in 1979, have steadily expanded cooperation in recent years, particularly in security and energy. This gas deal strengthens their partnership at a time of regional volatility, offering both countries a platform for deeper collaboration. For Israel, it enhances its standing as an energy exporter; for Egypt, it reinforces its role as a regional hub. Observers note that the accord could also encourage further cross-border energy projects in the Eastern Mediterranean.

Still, challenges remain as Infrastructure upgrades will be necessary to transport the gas efficiently and both governments must ensure regulatory frameworks are aligned. Environmental groups have also raised concerns about the long-term reliance on fossil fuels, urging greater investment in renewable energy. Nevertheless, the deal is seen as a pragmatic step toward energy security and economic growth for both nations.

Sources:

Reuters. “Israel Approves Natural Gas Deal with Egypt, Netanyahu Says.” Reuters, 17 Dec. 2025, https://www.reuters.com/business/energy/israel-approves-natural-gas-deal-with-egypt-netanyahu-says-2025-12-17/.

Times of Israel. “Israel Set to Sign Major Gas Export Agreement with Egypt after Months-Long Delay.” The Times of Israel, 17 Dec. 2025, https://www.timesofisrael.com/liveblog_entry/israel-set-to-sign-major-gas-export-agreement-with-egypt-after-months-long-delay/.

Independent. “Egypt, Benjamin Netanyahu, Israeli Jerusalem, Chevron.” The Independent, 17 Dec. 2025, https://www.independent.co.uk/news/egypt-benjamin-netanyahu-israeli-jerusalem-chevron-b2886591.html.

Yahoo Finance. “Netanyahu Approves $35 Billion Natural Gas Export Deal with Egypt.” Yahoo Finance, 17 Dec. 2025, https://finance.yahoo.com/news/netanyahu-approves-35-billion-natural-194253344.html.