War on Iran: Why Egypt cannot afford to take sides
Since the outbreak of regional war in February, through to the initial collapse of Pakistan-led negotiations between the US and Iran this month, Egypt has behaved differently than Gulf states might have expected.
While the Egyptian foreign ministry swiftly condemned Iranian attacks against Gulf states and Jordan on the first day of the war, signalling an official alignment with the Gulf Cooperation Council (GCC), this was followed by a diplomatic pivot towards neutrality - one synchronised with Turkey and Pakistan.
While some analysts viewed this as a progressive step in Egyptian foreign policy, others labelled it a dramatic and adventurous shift.
In my assessment, Cairo has entered the diplomatic fray as the proverbial “canary in the coal mine”. Should the regional conflagration broaden or persist, Egypt’s systemic economic crisis will deepen further, plunging the country into turmoil.
Egypt’s pursuit of a mediating role thus serves as a strategic imperative, as it aims to avoid being drawn into a conflict whose logistical and fiscal demands it would be unable to fulfill.
The tripartite coordination between Egypt, Pakistan and Turkey is underpinned by a shared alignment with western security architecture, as all three remain pivotal allies of the US, particularly within the military sphere.
Turkey maintains its strategic anchor as a Nato member, while Pakistan’s military leadership continues to receive a high-level reception at the White House. Egypt’s defence posture remains fundamentally linked to Washington through its annual $1.3bn in military aid.
This nascent axis also maintains functional, pragmatic relations with Tehran. While Pakistan and Turkey share borders and a history of established diplomacy with Iran, Egypt is the most cautious actor, having severed diplomatic ties with Tehran in 1979, the year of the Iranian revolution and the Egypt-Israel peace treaty.
Bridging the divide
In recent days, however, Cairo has signalled a thaw, notably attempting to bridge the divide between Iran and the International Atomic Energy Agency via the short-lived Cairo Agreement following the 12-day war last June.
Furthermore, both Egypt and Turkey possess the unique leverage of normalised - albeit strained - ties with Israel, serving as vital channels for the Gaza ceasefire that went into effect last October.
Coupled with the three countries’ robust economic and security partnerships with GCC states, and their relative insulation from direct Iranian strikes during the current war, these nations possess the requisite diplomatic capital to function as an effective mediatory bloc.
Egypt faces the acute risk of alienating its traditional allies by failing to meet their military and strategic expectations in the current confrontation
For Egypt, the conflict erupted while the country was already navigating a precarious fiscal landscape: its external debt has reached a staggering $169bn, around 40 percent of GDP, with $27bn in debt service due in 2026. Interest payments have swelled to consume more than 50 percent of total government expenditures.
The direct impact of the regional conflict on Egypt’s internal markets are vividly illustrated by a staggering 77 percent collapse in export volumes. This trade paralysis is compounded by up to $8bn in capital outflow, as investors flee regional uncertainty.
Cairo’s fiscal equilibrium remains acutely sensitive to the interplay of three primary variables: oil prices, tourism revenues and worker remittances (the latter of which accounted for $41.5bn in 2025).
Compounding this precarity is the anticipated contraction of GCC financial aid and direct investment, amid the heavy burden of the war on local economies, alongside a strategic reassessment by Gulf partners - especially the UAE and Saudi Arabia - of the Egyptian regime, after Cairo’s reluctance to provide robust military assistance against Iranian attacks.
Cairo sought to contain the fallout diplomatically through a series of state visits - led by the president himself - to various Gulf nations, in a sign of solidarity.
Strategic choice
Egypt’s acute economic vulnerabilities, manifested in massive fuel-price hikes and systematic power outages as Israeli natural gas supplies were temporarily halted due to the war, underscore the strategic rationale behind Cairo’s intensive engagement in mediation alongside Pakistan and Turkey.
In the wake of the 2013 military coup, Egypt’s regional influence atrophied, as domestic structural instability and fiscal upheaval ceded the geopolitical initiative to ascendant powers like Saudi Arabia.
This period of strategic retreat was characterised by an erosion of Cairo’s traditional leverage across critical theatres, as seen in the failed talks over the Grand Ethiopian Renaissance Dam, the Libyan civil war and the Sudanese conflict.
In this context, diplomatic mediation became a strategic choice to offset the absence of more assertive forms of power. This pivot was inaugurated during the 2014 Gaza war and culminated in Cairo’s instrumental role in securing the October 2025 ceasefire, alongside Qatar and Turkey.
This success in Gaza has arguably strengthened the regime’s resolve, validating the premise that Egypt’s unique geographical position remains its most resilient currency - both a logistical burden and its primary strategic asset.
Egypt has consequently institutionalised mediation as a fundamental foreign policy choice, one designed to stabilise its standing with global patrons like the US and regional powers. It can thus present itself as a sincere ally, while simultaneously avoiding entanglement in kinetic conflicts whose prohibitive fiscal and political costs it can no longer tolerate.
The deliberations unfolding in Pakistan reflect this strategic pragmatism. Ultimately, Cairo’s calculus for reaching a deal and ending this war is predicated upon several critical imperatives, including the containment of Israeli expansionism and regional hegemony - which, if left unchecked, would inevitably restrict Egypt’s own sphere of influence - and the prevention of a prolonged conflict, amid the existential threat it poses to domestic economic stability.
Egypt recognises that the collapse of Iran as a regional power would enable uncontested Israeli dominance over the entire Middle East. But it also faces the acute risk of alienating its traditional allies by failing to meet their military and strategic expectations in the current confrontation.
The views expressed in this article belong to the author and do not necessarily reflect the editorial policy of Middle East Eye.
This article was sourced from Middle East Eye.
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