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S&P Warns of Longterm Shortage in Egypt's Gas Supply

The Tamar gas platform off the coast of Israel. (Chevron)
The Tamar gas platform off the coast of Israel. (Chevron)
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S&P Warns of Longterm Shortage in Egypt's Gas Supply

The Tamar gas platform off the coast of Israel. (Chevron)
The Tamar gas platform off the coast of Israel. (Chevron)

Standard & Poor's warned that the escalation of Israel's war in Gaza may leave Egypt facing a long-term shortage in gas supplies.

In a report seen by Asharq Al-Awsat on Monday, the agency said that "the war will largely be contained to Israel and Gaza and last no more than three to six months."

However, further escalation, also spreading beyond Israel's borders, could involve damage to pipelines or obstruction of shipping in the Strait of Hormuz.

"We believe if that were to happen, Israel's gas exports could stop completely. And we don't think many producers in the Gulf Cooperation Council (GCC) could fill that gap since most of their gas production is already under contract," read the report.

"We assume the war will remain centered in Gaza and have a low impact on Israel's neighbors, but if it spreads to important delivery channels, Egypt – which is already rationing gas – might struggle in the medium term, in our view."

Standard & Poor's indicated that this situation could eventually "hurt credit quality in the region if it escalates further."

In its latest report on Egypt on Oct. 20, the agency lowered its long-term foreign and local currency sovereign credit ratings on Egypt to "B-" from "B." The outlook is stable. We also affirmed our short-term sovereign credit ratings at "B."

It has also announced that it was lowering Israel's credit outlook from stable to negative. The credit rating itself remains unchanged at AA-.

Since the start of the war, Israel has shut down the Tamar gas platform, which produces about 10 billion cubic meters of gas, about 85 percent of which is used for the Israeli domestic market, and about 15 percent of the remaining is exported to Jordan to generate electricity, and Egypt to liquefy and export to Europe.

Since 2020, Israel has provided almost all of Jordan's natural gas supply and 5 percent to 10 percent of Egypt's, according to S&P Commodity Insights data.

"Yet we believe Egypt's gas supply is more exposed than Jordan's because Jordan has an unused LNG plant and an offtake agreement with Israel," said the report.

Gas production in Israel is down almost 50 percent due to the repercussions of the war.

Israel produced about 22 billion cubic meters (bcm) of natural gas in 2022, about one percent of the global total.

It exported a combined nine bcm to Egypt and Jordan, according to S&P Global Commodity Insights data. Most of Israel's gas production comes from offshore fields in the Mediterranean Sea.

Since 2019, Egypt has achieved self-sufficiency in gas production to meet domestic demand, and about 60-65 percent of it is consumed as fuel for power generation, and 20-25 percent goes for industrial use.

Egypt imported about six billion cubic meters of gas in 2022 from Israel, converting some of it into liquefied natural gas and then exporting it to Europe.

It contributes less than five percent of Europe's natural gas needs.

Europe imports most of the LNG it needs from the US and Qatar. The EU has also exceeded its 95 percent target inventory level and, barring an unusually cold winter, has sufficient gas supply without LNG from Egypt.

However, even before the recent escalation in Israel, increased demand for energy led to blackouts in Egypt. It came amid lower gas production in Egypt and a greater need for gas to fuel cooling units during this year's unseasonably hot summer.

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Business

Trump Threatens to Increase Canada Tariffs over Wildfire Smoke Pollution

Light reflects off the water as the sun sets through wildfire smoke over Edmonton, Alberta, Friday, July 17, 2026. (AP Photo/Andy Bao)
Light reflects off the water as the sun sets through wildfire smoke over Edmonton, Alberta, Friday, July 17, 2026. (AP Photo/Andy Bao)
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Trump Threatens to Increase Canada Tariffs over Wildfire Smoke Pollution

Light reflects off the water as the sun sets through wildfire smoke over Edmonton, Alberta, Friday, July 17, 2026. (AP Photo/Andy Bao)
Light reflects off the water as the sun sets through wildfire smoke over Edmonton, Alberta, Friday, July 17, 2026. (AP Photo/Andy Bao)

US President Donald Trump threatened on Friday a tariff increase on Canada to cover the cost of smoke pollution from wildfires that have choked large parts of the United States.

Dense wildfire smoke billowing down from Canada and northern Minnesota has set off unhealthy air quality alerts across the US.

As of Saturday, there were 937 active fires in Canada, most of which were burning out of control, according to the Canadian Wildland Fire Information System.

"This is Willful Negligence, and becoming a yearly occurrence, costing the United States Billions of Dollars," Trump said on Truth Social, adding that the "cost of this pollution must of necessity be added to the TARIFFS Canada is currently paying."

Trump accused Canada of "not properly maintaining" their forests, failing to carry out "basic Forest Management and Debris Removal."

AFP quoted him as saying he would call Prime Minister Mark Carney "to find out what they are going to do about" the smoke.

Canada's emergency management minister Eleanor Olszewski said Canada and the United States were in "constant contact," pointing toward their "long history of working together to fight wildfires."

She added that Canada has invested $12 billion in forests sustainability and fire prevention since 2020.

Detroit, in the US Midwest, remained the most polluted city in the world on Friday, according to tracker IQAir. Washington and Chicago weren't far behind, and officials warned against spending unnecessary time outside.

The pollution triggered concern over the World Cup final on Sunday in an open stadium in New Jersey.

In New Jersey and New York, the metro area was experiencing air that could be unhealthy for sensitive groups, an improvement after smog on Thursday made the Manhattan skyline barely visible.

But the National Weather Service (NWS) warned the smoke may thicken overnight into Saturday morning.

Tournament organizers are "monitoring closely," White House World Cup task force executive director Andrew Giuliani told a briefing.

Peter Mullinax, a meteorologist for NWS, told AFP that winds over the Great Lakes could push more smoke into the Northeast, which could keep skies hazy.

He said forecasts for that region do expect some improvement.

"I don't believe that this should be as impactful as if you might be playing a game today," Mullinax said.

The issue for Sunday's game, said Joel Dreessen, an air quality forecaster for the state of Maryland, is whether more smoke spills south after weekend storm systems.

"Some of the models are starting to indicate that we'll start to pull down some smoke," he told AFP.

In cities across the Midwest and Northeast, people wore masks outdoors to filter out the dangerous air. In New York, libraries and train stations were handing them out for free.

Chris Carlsten, who studies the health impacts of fire smoke at the University of British Columbia, told AFP that the fine pollution particles from wildfires are particularly impactful on the lungs, whereas vehicle pollution skews slightly towards heart impacts.

He said plumes can be filled with wood and vegetation debris but also paint, plastic or metal.

And as smoke plumes travel, they undergo "photochemical aging," a series of reactions that Carlsten said "seem to make, from everything we understand in the chemistry, the aerosol more toxic."

The upper Midwest that is closer to the fires has faced especially bad air, with parts of Michigan, Minnesota and Wisconsin all recording air quality readings deep into the "hazardous" range for days.

Advocates have stressed the connection between repeated episodes of wildfire smoke and climate change.

Mark Parrington, a scientist at the Copernicus Atmosphere Monitoring Service, told AFP that climate change was providing conditions for a longer fire season, with higher surface air temperatures and lower soil moisture.

So, he explained, "when there's an ignition we see these really large-scale, persistent burning where these fires can burn for weeks and weeks at a time through summer."

The blazes were worsening on Friday in Canada, especially in Ontario, according to authorities there.

Fires in Ontario have not caused any casualties, and several remote communities have been evacuated, as dozens of aircraft battle the blazes.

Meanwhile 16 active fires were burning in the Superior National Forest, on Minnesota's border with Canada.

"The forecast for erratic weather, shifting winds and the potential for isolated damaging wind gusts and thunderstorms will be a challenge for firefighting efforts," the US forest service said.

Business

Al Akaria Riyadh Land Cleared, Returning Strategic Asset to Development

Al Akaria participates in the Cityscape Global exhibition (Company handout)
Al Akaria participates in the Cityscape Global exhibition (Company handout)
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Al Akaria Riyadh Land Cleared, Returning Strategic Asset to Development

Al Akaria participates in the Cityscape Global exhibition (Company handout)
Al Akaria participates in the Cityscape Global exhibition (Company handout)

Lifting regulatory restrictions on real estate assets marks an important stage in the investment cycle, allowing owners to regain flexibility in managing and developing their properties.

Saudi Real Estate Co. (Al Akaria), which is majority-owned by Saudi Arabia’s Public Investment Fund, said restrictions had been lifted on a plot of land it owns in Riyadh’s northern Al-Arid district.

Experts said the move gives the company a wider range of investment options, although its economic value will ultimately depend on management’s ability to develop or invest the land in ways that generate future returns.

The company received the property registration deed issued by the Real Estate Registry, lifting restrictions on the 30,000-square-meter plot, which has a book value of 98.4 million riyals ($26 million).

The move transforms the property from an asset unavailable for development into one that can be used as part of the company’s investment strategy.

Sulaiman Al-Hamid Al-Khalidi, a financial and economic expert and member of the Saudi Economic Association, told Asharq Al-Awsat that the decision had renewed attention on one of the most important assets in Al Akaria’s portfolio and raised questions about whether it could strengthen the company’s market value in the coming period.

Greater asset management flexibility

Al-Khalidi said that although Al Akaria had confirmed there would be no immediate financial impact, the significance of the development went beyond its short-term accounting effect.

It gives the company greater flexibility in managing one of its strategic assets and allows it to benefit from the property through development, partnerships or the restructuring of its investment uses in ways that support future growth, he added.

From an investment perspective, investors do not generally view the removal of regulatory restrictions as an objective in itself, but rather as a step that can pave the way for the creation of new economic value.

The true assessment of the decision will therefore depend on management’s ability to turn the asset into a source of returns and cash flows, rather than merely regaining the right to dispose of it, Al-Khalidi said.

He said a legitimate question remained over whether the market had anticipated the development and already priced in a large part of its positive impact, particularly as investors had been following efforts to resolve the issue.

In such cases, continued momentum depends more on subsequent disclosures and implementation plans than on the announcement itself, he said.

The decision is also important for the broader property sector because it reflects stability and growth in the real estate market, he added.

Awaiting development plans

Al-Khalidi said markets reward companies not for announcements alone, but for their ability to turn developments into profits and cash flows.

The lifting of restrictions on Al Akaria’s land is therefore a positive step, but the final assessment will remain linked to the development and investment plans the company announces in the coming period, he said.

Decision supports real estate activity

Abdullah Al-Mousa, a property expert and observer, told Asharq Al-Awsat that lifting the restrictions was a positive development from a market perspective, as it returned a major real estate asset to economic use after a period of uncertainty.

When large plots become available for development or investment, they support activity in the property sector and create opportunities for new projects that can increase supply and stimulate investment, he said.

This is particularly significant when the land is strategically located in northern Riyadh, an area experiencing rapid urban growth, he added.

Al-Mousa said the real impact would not be measured merely by the removal of the restrictions, but by how quickly the asset was converted into a productive project that added value to the market.

Actual development is what affects investment volumes, employment opportunities and the diversity of real estate products, he said.

The decision is positive because it gives the company greater flexibility in managing one of its strategic assets, whether through direct development, partnerships, or other forms of investment consistent with its operational plan.

It could also increase the asset’s economic value and improve the options available to management for its future use, Al-Mousa said.

The actual financial impact, however, will depend on what the company later announces regarding its development plans, investment approach and implementation timetable.

Lifting the restrictions is a preliminary step, while economic value will be realized only when development or investment begins, he added.

Saudi Real Estate Co. announced that restrictions on the land it owns in the Al-Arid district of northern Riyadh were lifted following the issuance of a property registration deed by the Real Estate Registry.

The 30,000-square-meter plot is located within the commercial corridor between King Fahd Road and Olaya Road.

The property was among the plots mentioned in Emphasis of Matter paragraph 5/A of the company’s external auditor’s report on its condensed consolidated interim financial statements for the period ending March 31, 2026.

The paragraph stated that some company-owned plots were unavailable for use or development at the time, for various reasons related to conditions in the areas where the properties were located, or for other reasons under review by the relevant committees.

The company said it was studying the best possible uses for the land in line with its strategy and in a manner that would create added value for the company and its shareholders.

It said lifting the restrictions would have no immediate financial impact and that it would disclose any material developments in due course in accordance with applicable laws and regulations.

The company’s financial statements show that it owns land that is currently unavailable for disposal or development, with a total book value of more than 3 billion riyals.

Management is working with the relevant authorities to resolve the obstacles affecting those properties as part of a strategy to develop strategic assets and exit non-priority land holdings.

The strategy is intended to improve the efficiency of the company’s portfolio and reduce the costs associated with fees imposed on undeveloped land.

Business

Oil Rises on Renewed US-Iran Hostilities and Threat of Red Sea Closure

Drills operate in an oil field in California (Reuters)
Drills operate in an oil field in California (Reuters)
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Oil Rises on Renewed US-Iran Hostilities and Threat of Red Sea Closure

Drills operate in an oil field in California (Reuters)
Drills operate in an oil field in California (Reuters)

Oil prices rose by more than 2% on Friday after the US and Iran stepped up attacks across the Gulf, with shipping threatened by a potential Red Sea closure on top of the restricted traffic through the Strait of Hormuz.

Brent crude futures rose by $1.77, or 2.1%, to $86 a barrel by 1158 GMT. US West Texas Intermediate futures were up $1.91, or 2.4%, at $80.86.

Both benchmarks have climbed about 13% this week, with Brent on track for a third consecutive weekly gain and WTI set for its second.

Diesel refining margins hit record highs on Friday, with low-sulphur gasoil futures touching $66.25 over Brent crude.

The Middle East is a major diesel exporter and the Hormuz closure, as well as attacks on oil refineries, have tightened fuel markets and bolstered prices globally. The broken truce between the US and Iran has resulted in a drop in oil flows out of the strait.

Iran said it launched fresh strikes on US facilities in the Middle East on Friday, including the first direct attack in Syria, after a sixth straight night of US strikes on Iranian military facilities. US Central Command said on Thursday that American forces had begun a new wave of strikes against Iran to further degrade Iranian military capabilities. "Oil security is still a critical issue," International Energy Agency Executive Director Fatih Birol said on Thursday at a Council on Foreign Relations event in Washington.

"We should be worried, and I am worried, if the situation does not improve in the next few weeks," he said.