How is Egypt reinforcing its role as a regional logistics and energy hub amidst the conflict with Iran?

Geopolitical tensions in the Middle East and disruptions to key maritime routes have brought renewed urgency to Egypt’s strategy of consolidating its role as a regional energy and logistics hub. Its geographical location is now seen as essential for securing trade between the Middle East, Africa, and Europe.

This shift is particularly evident in the energy sector. From the very first weeks of the conflict, the Saudi crude oil export corridor via Egypt regained strategic importance. Oil is transported via the Saudi East-West Pipeline to the port of Yanbu on the Saudi Red Sea coast; by mid-July 2026, more than 70% of Saudi oil exports had been rerouted to this location.

Some shipments are then transported by sea to Ain Sokhna. From there, the oil moves through the onshore SUMED pipeline (owned by the Arab Petroleum Pipelines Company—with stakes held 50% by the Egyptian state-owned EGPC, 15% by Saudi Aramco, 15% by the Emirati fund Mubadala Investment Company, 15% by the Kuwait Investment Authority, and 5% by Qatar Energy), which connects the Red Sea to the Mediterranean, before being exported to international markets.

This corridor offers a transport capacity of up to approximately 2.5 million barrels per day across all flows. Additionally, Egypt has made ten storage facilities for crude oil and refined products along the Red Sea available for lease. With surplus capacity estimated at 29 million barrels, the country is also seeking to position itself as a regional hub for the storage, transit, and redistribution of hydrocarbons.

In the logistics sector, Egypt is simultaneously establishing itself as a new transit hub between Europe and the Gulf states. This evolution is driven by the development of port infrastructure—specifically the hubs at Ain Sokhna, East Port Said, and Safaga—and a profound transformation of inland infrastructure.

The country is developing eight multimodal corridors centered on several major infrastructure projects. These include a high-speed rail network led by Siemens (which incorporates a freight component) and dry ports at 6th of October City and 10th of Ramadan City. The rehabilitation of the freight rail network is complemented by the construction of a strategic 275-kilometer link between Taba, on the Gulf of Aqaba, and El Arish, in northern Sinai. Furthermore, since 2014, nearly 6,500 kilometers of new roads have been built and approximately 8,500 kilometers of existing routes modernized, facilitating the movement of goods along key logistics corridors.

The rapid development of new trade routes has enabled the transport of certain goods—particularly agri-food and pharmaceutical products—to the Mediterranean coast. From there, they are moved overland to the Red Sea before being re-exported by sea to Saudi ports, from where they can be distributed to Riyadh, Dammam, Kuwait, or Dubai.

Egyptian authorities report a nearly 40% increase in transit flows since the onset of the crisis.

Although its use remains vulnerable to regional tensions, it serves as a vital alternative route—bypassing potential bottlenecks in the Persian Gulf—for cargo moving from Asia or Europe to Saudi Red Sea ports, such as Jeddah and King Abdullah Port. To avoid the Bab el-Mandeb Strait, where the risk of Houthi attacks is highest, shipping companies are favoring maritime shuttle services. Mid-sized vessels thus connect Mediterranean hubs—such as Tangier Med, Algeciras, and Port Said—to Saudi ports via the Suez Canal before making the return journey.

Authorities have now signaled their intention to establish these corridors on a long-term basis and to develop two “Arab trade routes,” an initiative launched under the leadership of President Sisi. A northern axis would link Alexandria to Jordan, Syria, and Iraq, while a southern axis would connect Aswan and the ports of Safaga and Berenice to East Africa and the Arabian Peninsula.

Some goods in transit to Gulf countries are now exempt from prior registration on the Nafeza platform. Egypt is also preparing for its operational integration into the TIR international road transit system—a move confirmed in July 2026 and expected to take place within six months. Spearheaded by the International Road Transport Union and backed by the United Nations, this mechanism—adopted by nearly 80 countries—facilitates the movement of goods by exempting transit cargoes from standard customs checks.

It also incorporates a comprehensive financial guarantee designed to protect customs authorities against financial risks associated with the loss, diversion, or other irregularities involving goods in transit.

The system enables a 25% to 40% reduction in transport costs and cuts transit times by up to 80%. Coupled with efforts to digitize procedures and—more broadly—comprehensive customs reform, this development further demonstrates Egypt’s commitment to strengthening its logistics competitiveness.

In doing so, Egypt aims to leverage its geographical advantage and current regional shifts to cement its long-term position as an energy, maritime, and land-based hub connecting Europe, the Gulf, and Africa.

Source: Embassy of France in Cairo