Escalation of Gaza conflict will cause gas supplies to Jordan, Egypt to get cut

(MENAFN) As the Israel-Gaza conflict continues, S&P Global warns of potential repercussions for Israel's gas supplies to Egypt and Jordan, posing a risk of long-term shortages for these North African nations amid an already constrained global supply. In a worst-case scenario, should the conflict escalate beyond Gaza's borders and cause damage to export pipeline infrastructure, Israel's gas exports could cease entirely, according to S&P's recent report.

Analysts at S&P Global note that an interruption in Israel's gas exports would be challenging to address, as most gas production in the Gulf Cooperation Council (GCC) countries is already committed under existing contracts. This scenario would leave Egypt vulnerable to a prolonged shortage at a time when global energy supply is already under strain.

The Israel-Gaza conflict, which has evolved into a significant humanitarian crisis, adds a layer of uncertainty to the global economy. A potential flare-up in the conflict could disrupt shipping operations through the vital Strait of Hormuz, limiting energy supplies from the region and further impeding economic growth already impacted by persistent inflation and high borrowing costs.

The disruption of Israeli gas supplies would compound economic challenges for Egypt and Jordan, both of which are grappling with a slowdown in their crucial tourism sectors—a key source of foreign exchange. An escalation of the conflict, which began on October 7, could have far-reaching consequences for the broader Middle East and North Africa (MENA) economies, including Israel.

This article delves into the intricacies of the potential impact of an escalation in the Israel-Gaza conflict on regional energy dynamics, economic stability, and the broader geopolitical landscape. As tensions persist, the article explores the multifaceted challenges and risks associated with the conflict's potential spillover effects on neighboring nations and the MENA region as a whole.


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