The Damietta Strike: Mediterranean Gas, Deterrence, and Strategic Exposure

On July 29, Egypt became the latest state in the region to be exposed to drone strikes when a drone hit two liquified natural gas tankers at Damietta Port on Egypt’s Mediterranean coast. Despite the Egyptian government confirmation of the strike, the government maintained it plans to conduct a thorough investigation before blaming anyone for the attack.

The ongoing escalation in the region, especially the attacks on energy infrastructure suggest that the strike may have been part of an attempt to expand the conflict as part of a Tehran-linked strategy to increase and to spread the cost of war to the region. However, the details of natural gas deals in the Mediterranean offer a different dimension to the drone strike.

Eastern Mediterranean reserves

Natural gas discoveries began rocking the region in the late 2000s, with the largest proven reserves in off the coasts of Egypt (77.5+ Trillion cubic feet) and Israel (20.8+ Trillion cubic feet). Still, there are major reserves in Libya (50+ Trillion cubic feet), Cyprus (12.7+ Trillion cubic feet) and Greece (20+ Trillion cubic feet). Discoveries like Tamar Gas Field in 2009 with over 7 trillion cubic feet in proven reserves, Dalit Gas Field (2009), and Leviathan Gas Field (2010) gave Israel an early advantage in natural gas production and exports to its neighbors through pipelines, becoming self-sufficient in 2013, then an exporter in 2017. Israel’s proven natural gas reserves currently sit at just above 38 trillion cubic feet.

Egypt, recovering from political and security crises in 2011 and 2013, entered the natural gas market with the discovery of the Zohr Gas Field in 2015, the largest gas field yet in the Mediterranean basin at over 30 trillion cubic feet, turning it to a net exporter in 2018, Egypt also discovered Atoll Gas field in 2015.

Currently, Egypt’s proven natural gas reserves are just above 77 trillion cubic feet, the largest in the region. However, most of these reserves remain largely untapped due to the mounting economic and debt crises after COVID-19. Consequently, Egypt built the only liquefaction facilities in the region, in Idku and Damietta, making it the only country in the region with LNG liquification facilities capable of exporting natural gas overseas, giving it a strategic advantage despite production issues in Zohr Gas Field.

Current regional agreements

Most of the natural gas agreements in the region revolve around exporting to Europe, which has a high demand and limited domestic supply and a need to diversify its imports after being dependent on its adversary, Russia. Europe primarily imports natural gas from Norway, the US, and Algeria. However, with more supply in the Mediterranean basin, European governments look to secure cheaper natural gas supplies. 

For these reasons, natural gas producers in the Eastern Mediterranean region struck deals between them that involve importing and exporting from each other based on liquification capacity. For example, Egypt signed a historic $35 billion gas import deal with Israel despite being a producer itself. However, Egypt remains the only state in the Eastern Mediterranean region with liquification capacity in Damietta and Idko, and therefore the capacity to export to Europe.

This means that Egypt buys gas from other states on the Eastern Mediterranean coast to liquify a portion of it, then exports it to Europe. Just days ago, on July 28, the latest agreement of this nature was signed between Eni and TotalEnergies to develop Cronos gas field off the coast of Cyprus, then export it to Egypt, which will liquify it and re-export it to Europe. This arrangement allows each state in the region to increase their income from energy exports and helps European states diversify their energy imports as intended. 

However, in the long run, Egypt appears to maintain long term advantage in natural gas supplies/reserves. Just this year, two major discoveries were uncovered by ENI and BP with an estimated capacity of 2.3 trillion cubic feet in Denise West and South Bostan-1X, and a discovery in Nidoco N-2, expected to add 50 million cubic feet per day.

ENI also made another recent discovery in the Temsah field off Egypt’s Mediterranean coast which is estimated to add another 2 trillion cubic feet to Egypt’s reserves. The government already closed out its debts to energy companies to clear the way for more drilling and discoveries. Adding the exclusive export capacity Egypt has in the region, it could become Europe’s leading natural gas supplier in the Eastern Mediterranean region, potentially easing the Egyptian government’s expensive import burden.

Concurrently, with Israel’s cutting or delaying shipments to conflict, Egypt signed an agreement in January 2026 to import Qatari natural gas which will likely reduce the effect of Israeli gas interruptions on Egypt’s imports.

Why Damietta matters?

Considering the information above, the available evidence suggests that the drone strike in Damietta port has significant implications for Egypt’s natural gas agenda. Specifically, the strike targeted a floating storage and regasification vessel, sparking a fire in a second liquified natural gas tanker. This shows that the attacked ship was bringing natural gas for domestic Egyptian use.

This could disrupt Egypt’s gas reserves, which may lead to power cuts at a peak usage time. Strategically, the attack hit right at Egypt’s key mediterranean export terminal, Damietta, at a time when Egypt is expanding its drilling efforts, diversifying its natural gas imports and expanding its exports. This could be interpreted as an attempt to deter Egyptian natural gas ambitions.

The timing of the attack suggests that the strike may have been designed to implicate Iran in an attempt to expand the conflict and further disrupt energy supply chains to Europe. That would be a plausible explanation given Iran’s attacks on energy infrastructure in the Gulf. However, with Iran’s denial and Egypt’s restraint, the perpetrator of the attack remains unknown.

Egypt’s deterrence dilemma

The 12-hour delay between the strike itself and the government’s announcement suggests that the Egyptian government is still considering its options in the face of attack. While there are reports that Egyptian officials already blame Iran for the strike, Egypt’s State Information Service announced that the investigation is ongoing, and the source of the drone remains unknown.

Simultaneously, the attack comes at a critical time for Egypt’s economy, which is already facing a high natural gas import bill and therefore could jeopardize Egypt’s plan to ease that bill by increasing drilling and exporting. The surgical targeting of Damietta port supports the explanation that the attack implicitly targets Egypt’s economy and energy supplies as opposed to regional energy supplies. Therefore, the strategic impact of the attack may pressure the Egyptian government to retaliate against the party responsible for the attack to deter any further attacks on its critical infrastructure, which would constitute a major escalation to a conflict that has already drawn much of the region into it.

Regardless of whether Iran or any of its allies committed the strike, it has already been considered an expansion of the conflict since the attack occurred against the backdrop of ongoing attacks on energy infrastructure and the fact that Egypt remains the only state in that region – besides Pakistan – that hasn’t been targeted as cover for the strike. This makes Egypt’s prospect for deterrence more complicated given its role as a regional mediator and a force for de-escalation. Therefore, the attack may have also been motivated by an intent to widen the conflict and reduce chances for de-escalation.

The Damietta drone strike highlights Egypt’s growing exposure to regional escalation. While the source of the attack remains unconfirmed, its timing and target raise serious questions about whether Egypt’s LNG facilities are becoming part of the wider conflict over energy routes, regional deterrence, and Mediterranean gas exports. For Cairo, the challenge is to respond firmly enough to protect its critical infrastructure, without being drawn into a broader confrontation.