Prime Minister Mostafa Madbouly chaired a meeting of the government’s Crisis Management Committee to assess the fallout from the ongoing US-Israeli war on Iran and its implications for the domestic economy.
Officials discussed a range of scenarios tied to how long the crisis persists, focusing on risks to oil prices, supply chains, and international trade, according to a cabinet statement. A report presented at the meeting warned of mounting pressure on global energy markets, alongside broader uncertainty that could weigh on growth and force adjustments to major economic indicators.
At home, the government is intensifying real-time monitoring of key economic variables, including commodity prices, foreign exchange movements, Suez Canal traffic, and electricity production and consumption. The system, developed by the cabinet’s Information and Decision Support Center (IDSC), tracks daily changes in both food and non-food markets as authorities seek to contain volatility.
Officials said measures already put in place aim to preserve economic stability, secure energy supplies, and prevent market disruptions.
Cabinet spokesperson Mohamed ElHomosany said the Central Bank of Egypt (CBE) governor, Hassan Abdalla, outlined efforts to ensure financing for essential imports and production inputs, while maintaining access to foreign currency for the private sector.
Egypt’s foreign currency reserves provide a degree of protection against external shocks, he added.
The government is also reviewing public spending to improve efficiency as global trade and supply chains come under strain. At the same time, officials are exploring ways to expand exports to boost foreign currency inflows.
Food security remains a central concern. The committee said wheat reserves are sufficient to cover domestic demand for several months, while efforts are underway to diversify import sources and maintain stable supply lines.
Energy supply was another focus of the meeting, with officials reviewing plans to secure natural gas through diversified sourcing and to manage petroleum distribution through a digital system designed to improve allocation and monitor consumption. Current reserves of fuel and gas are considered adequate to meet domestic demand, the cabinet said.
The latest review builds on a series of measures introduced in recent days to cushion the impact of the conflict. Earlier this month, the government approved spending cuts and energy-saving steps, including reducing official travel, limiting public sector activities, tightening fuel consumption, and curbing non-essential imports.
Authorities are also promoting public transport, accelerating the conversion of vehicles to natural gas, and expanding plans for electric vehicle use to reduce pressure on fuel demand and foreign currency reserves.
At the same time, Egypt has moved to safeguard one of its most critical sources of hard currency. President Abdel-Fattah El-Sisi has ordered heightened readiness at the Suez Canal, directing authorities to maintain full operational capacity amid rising risks to global shipping.
The Suez Canal Authority (SCA) has increased preparedness across all facilities and continues to provide round-the-clock navigation services, according to officials.
The measures follow growing concerns over disruptions at key maritime chokepoints, including the Bab el-Mandeb Strait, susceptible to attack by the Yemeni Houthis, and the Strait of Hormuz, blocked by the Iranian Revolutionary Guard Council (IRGC).
Several major shipping companies, including Maersk, Hapag-Lloyd, and CMA CGM, have suspended Suez Canal transits and rerouted vessels since early March, citing security risks in the Red Sea.
The disruption has already come at a steep cost. Egyptian estimates suggest attacks on shipping in the Red Sea have resulted in roughly $9 billion in lost canal revenues. President El-Sisi said over the weekend that total losses since the outbreak of Israel's war on Gaza in October 2023 have reached about $10 billion.
For Egypt, the risks extend beyond shipping. The country is highly exposed to global commodity price swings, and any sustained disruption to energy flows—particularly through the Strait of Hormuz, which carries about one-fifth of global oil supply—could quickly translate into higher import costs and inflationary pressure.
The disruption to shipping and energy flows mirrors warnings from global institutions about the wider economic fallout of a prolonged conflict.
The International Monetary Fund (IMF) estimates that a sustained 10 percent rise in oil prices could push global inflation up by around 0.4 percentage points and reduce global growth by 0.1–0.2 percentage points, particularly impacting emerging markets.
The World Bank (WB) has warned that shipping disruptions in key corridors could raise global freight costs by 15–25 percent, with delivery times increasing by up to 15 days in worst-case rerouting scenarios.
According to Oxford Economics, a prolonged conflict affecting energy flows could cut global GDP growth by 0.3–0.5 percentage points, while pushing Brent crude prices above $100 per barrel under high-risk scenarios.
Energy intelligence firm Rystad Energy estimates that disruptions to Gulf supply routes could remove 3–5 million barrels per day from global markets in an extreme case, driving price spikes and increasing volatility.
Meanwhile, the International Energy Agency (IEA) has noted that global oil demand remains near 102–103 million barrels per day, meaning even limited supply disruptions can have outsized price effects.
Maritime data cited by global shipping analysts indicates insurance premiums for vessels transiting high-risk zones have surged by as much as 30–50 percent, adding further pressure on global trade costs.
For Egypt, these pressures are particularly relevant given its exposure to global commodity prices and its role as a key transit hub through the Suez Canal, where any slowdown in traffic directly affects foreign currency revenues.
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