Egypt Bets Big on Saudi Money as Gulf Risk Rises

Cairo’s pledge to defend Riyadh is, at bottom, a bid to protect a set of economic lifelines: Saudi investment and financial support, remittances from millions of Egyptians working in the kingdom, and Suez Canal revenues already battered by Red Sea instability. Egypt’s announcement that it would provide all forms of assistance to Saudi Arabia amid escalating Houthi attacks from Yemen is being read by analysts as both a security commitment and a commercial calculation, aimed at keeping Israel from establishing itself as a security player in a region vital to Egypt’s economy.

The financial stakes are substantial. Egypt has lost an estimated $20 billion in Suez Canal revenues since 2023, hit by regional instability following Israel’s war on the Gaza Strip and Houthi attacks on shipping in the Red Sea. The Bab el-Mandeb Strait, a key route to the canal, is a major source of revenue for Cairo, and any expansion of Israel’s influence over decisions affecting that corridor would touch directly on Egypt’s national income. Strengthening ties with Saudi Arabia, meanwhile, offers Egypt access to foreign investment, financial support and foreign currency as it seeks to shore up its finances.

The sequence of events began with money and markets in motion. On 16 October, US President Donald Trump said Israel had been helping Saudi Arabia counter Houthi attacks and suggested Riyadh should accept further Israeli assistance. On 17 October, President Abdel Fattah al-Sisi responded that Egypt would take any necessary measures to protect Saudi Arabia if Riyadh requested help, and he called an emergency parliamentary session to authorise possible troop deployment. The next day, the National Defence Council, Egypt’s top security body, pledged all necessary and possible support to safeguard Saudi Arabia’s security, stability and territorial integrity.

The pledge followed a visit by Saudi Crown Prince Mohammed bin Salman to Cairo the previous month to seek support against the Iran-backed Houthis, a trip that underlined the importance of Egyptian-Saudi coordination on Red Sea issues. For Cairo, which has longstanding strategic ties with Riyadh, the prospect of Israel becoming a more prominent security partner for the kingdom adds urgency to reinforcing its own role.

“Egypt’s interest lies in doing everything possible to strengthen its ties with Saudi Arabia, or at least to ensure that its relationship with Riyadh is closer than Israel’s,” Ahmed Aboudouh, an associate fellow at Chatham House in London, told The New Arab.

The commercial logic is inseparable from the geopolitical one. If Riyadh accepts Israeli assistance against the Houthis, cooperation in areas such as intelligence sharing and air defence could expand, potentially giving Israel a greater role in Gulf security. Since the 2020 Abraham Accords, brokered by the US during Trump’s first term to normalise relations between Israel and Arab countries including Saudi Arabia’s neighbours, the United Arab Emirates and Bahrain, Tel Aviv has expanded its economic, diplomatic and security partnerships in the Gulf. Trump has also pushed for normalising ties between Saudi Arabia and Israel, though Riyadh insists any normalisation depends on resolving the Palestinian issue, including the establishment of a Palestinian state.

For Egypt, that trajectory raises the risk of greater competition for influence. While Saudi Arabia turning to Israel for certain defence capabilities would not necessarily weaken Egyptian-Saudi relations, it could reduce Egypt’s role in shaping the kingdom’s security policy. Closer security ties between Israel and Saudi Arabia could also give Tel Aviv a greater role in shaping regional responses to threats, from Yemen’s Houthis to Iran.

“Egypt would oppose any attempt by Israel to become a player in the Arab world’s collective security, regardless of who was involved, and Saudi Arabia would certainly stand with Cairo. This means keeping Israel out of regional military and intelligence cooperation,” Egyptian military expert Samir Ragheb told The New Arab.

Egyptian political analyst Mokhtar Ghobashi said the pledge could deter Israel from seeking a Gulf security role. “Relying on Israel as a security guarantor for a country in the Arab world, amid divisions and conflicts between Arab states, is an extremely dangerous proposition,” he told The New Arab.

The costs of deeper involvement, however, are real. Egypt joined the Saudi-led coalition that intervened in Yemen against the Houthis in 2015, but its role remained limited. A deeper commitment now could expose Cairo to a costly conflict, particularly if operations extend beyond the defence of Saudi territory, straining Egypt’s resources and increasing its exposure to Red Sea instability. The extent and form of any assistance will therefore be crucial: intelligence-sharing, logistical support and maritime security cooperation carry different risks from deploying troops to Yemen. Cairo may seek to bolster Saudi Arabia’s defences while avoiding an open-ended conflict.

Sisi framed the potential role as defensive, saying Cairo had no intention of attacking any party. “We do not want to fight or attack anyone. We will only defend Saudi Arabia,” he said.

Aboudouh said another objective behind the pledge is protecting Egypt’s strategic interests in the Red Sea and around Bab el-Mandeb. “Egyptian officials may have concluded that expanding the country’s regional role is now crucial to protecting maritime traffic through the Bab el-Mandeb Strait against any Houthi attempt to exploit a conflict with Saudi Arabia to disrupt shipping, as they have done in the past,” he told The New Arab.

Egypt was the first Arab country to sign a peace treaty with Israel, in 1979, but relations have remained largely cold, marked by mutual distrust, periodic tensions and regional competition, particularly over Gaza and broader Middle East security arrangements. Whether Cairo can convert its pledge into preserved influence over the Red Sea corridor, without absorbing the cost of another Yemen entanglement, will shape the economics of the region’s next chapter.