By: Gastón Saidman

In a constantly shifting Middle East, energy and diplomatic interests are once again intertwining. The signing of the Abraham Accords in 2020 marked a turning point in the relations between Israel and several Arab countries, opening new possibilities for economic cooperation in key sectors like energy.

However, the Hamas offensive of October 7, 2023 reignited tensions in the region, generating uncertainty among investors and regional partners. Nevertheless, the accords remain in force, and economic ties continue to strengthen, as demonstrated by the recent gas export agreement between Israel and Egypt.

Cyprus: A New Player in the Energy Game

In this context, Cyprus is emerging as a key player. Although not a signatory to the Abraham Accords, its control over vast Exclusive Economic Zones (EEZ) in the Eastern Mediterranean gives it a strategic role in the exploitation and distribution of energy resources. Its geographical location and political stability position the island as a vital link in the region’s new energy landscape.

Key Details of the Israel–Egypt Gas Deal

Signed in August 2025, the agreement between Israel and Egypt is the largest in Israel’s energy history, with an estimated value of $35 billion. The contract states that Egypt will purchase 130 billion cubic meters (bcm) of natural gas until 2040, in two phases:

• Phase 1 (2026): Supply of 20 bcm to Egypt, following the completion of the third pipeline on the Ashkelon–Ashdod route.
• Phase 2: Expansion via a new pipeline from Nitzana, enabling the addition of 110 bcm and raising the annual supply to 12–13 bcm.

This agreement not only strengthens the Israel–Egypt energy alliance, but also consolidates Egypt’s role as a regional energy hub. At the same time, it creates new opportunities for Cyprus, which—though not directly involved—benefits indirectly from its strategic infrastructure and location.

Cyprus: The Future Energy Hub                                 

Cyprus’ position in the Eastern Mediterranean, along with its control of maritime zones with high energy potential, makes it a key piece of the regional energy ecosystem.

One of the main advantages for Nicosia is the possibility of becoming a logistics and transit hub for Israeli gas, especially if projects such as liquefaction terminals on the Cypriot coast or submarine connections to Europe are activated.

Additionally, Cypriot and international companies operating on the island could participate in infrastructure, storage, transport, and technical services, generating skilled employment and foreign investment.

In the medium term, Cyprus’ role as a connection point between producers (Israel, Egypt) and consumers (EU) could accelerate long-discussed projects like the EastMed pipeline, now revitalized by Europe’s need to diversify energy sources following the war in Ukraine.

From left to right: Gaston Saidman, Commercial Attaché of the Embassy of Cyprus in Israel Sofronis Papageorgiou and CEO of the Israel-Cyprus Chamber of Commerce Eran Cohen

Interview with Eran Cohen, CEO of the Israel–Cyprus Chamber of Commerce

To learn more about the opportunities emerging for Cyprus in this new energy scenario, we spoke with Mr. Eran Cohen, CEO of the Israel–Cyprus Chamber of Commerce, who shared his insights on Cyprus’ growing role as a regional energy actor.

G.S – How do you assess Cyprus’ current role in the new Eastern Mediterranean energy landscape following the Israel–Egypt deal?
E.C – Cyprus is not directly affected at this time by the gas deal between Israel and Egypt, but it will have an impact in the coming years when Cyprus starts exporting gas from its maritime territory.

G.S – Do you see specific opportunities for Cyprus to become a logistics or tech hub within the gas supply chain?
E.C – As is well known, Cyprus has discovered large gas reserves in its maritime territory, similar to those found in Israel’s maritime zone. The potential of these reserves is estimated in the tens of billions of euros. Cyprus is expected to begin gas exports in about six years, since the country itself consumes little gas, meaning most of it will be exported. Infrastructure already exists via Israel to reach Jordan and Egypt. Depending on political developments in the Middle East, Lebanon and Syria may also benefit from Israeli and Cypriot gas in the coming years. This potential could bring billions in royalties and tax revenue to Cyprus.

G.S – Which sectors of the Cypriot economy could directly benefit from this energy expansion?
E.C – Currently, several companies in Cyprus hold licenses to produce gas, including Delek (Israel) and U.S. firms Exxon and Chevron. The sooner Cyprus can export gas, the greater the potential growth of its economy.

León Amiras, President of the Israel–Cyprus Chamber of Commerce, added:

“At a time when the State of Israel faces not only military challenges but also a diplomatic battle for international recognition of its fight against Islamic terrorism, economic agreements such as this gas deal represent a strategic boost. These kinds of initiatives not only strengthen Israel’s economy but also consolidate its ties with regional allies like Cyprus and project stability to the international community. In that sense, this is a historic agreement.”

Conclusion

The new energy agreement between Israel and Egypt not only redefines alliances in the Eastern Mediterranean but also opens a window of opportunity for players like Cyprus. While its role is still emerging, all signs suggest that its projection as an energy, logistics, and geopolitical hub will become increasingly relevant in the coming years. In a global context where energy security is a top priority, the small Mediterranean island faces a historic opportunity.