Egypt signs lifeline million-barrel Libyan oil deal to defy Hormuz blockade

The decision comes as the Middle East faces an escalating regional crisis following the outbreak of war with Iran, which has led to a near-complete paralysis of maritime traffic through the Strait of Hormuz—the world’s most critical energy transit corridor.

A Strategic energy reorientation

The Hormuz bottleneck

The Strait of Hormuz, which typically handles 20% of the world’s daily oil supply, has been effectively closed since late February 2026 due to the ongoing conflict. This has forced major Gulf producers like Kuwait to trigger emergency exit from oil deals, as tankers are unable to safely navigate the Persian Gulf.

Replacing the Kuwaiti link

Historically, Egypt has relied on Kuwait for 1 to 2 million barrels of crude monthly to feed its domestic refineries. With that supply line severed, Cairo is leveraging its geographic proximity to Libya—which exports via Mediterranean ports—to bypass the blocked Gulf routes.