from Middle East Matters and Middle East Program

The Politics of Energy: What Morsi’s Fall Means for Jordan

August 13, 2013

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Blog posts represent the views of CFR fellows and staff and not those of CFR, which takes no institutional positions.

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This post is written by Sarah Craig, a Council on Foreign Relations research intern from Princeton University.

Jordan’s king Abdullah was the first foreign head of state to visit Egypt after the military’s July 3 removal of President Mohammad Morsi. Abdullah had spoken publicly against the Muslim Brotherhood in Jordan and clearly welcomed its fall in Egypt, congratulating both the army and interim president Adly Mansour on the leadership changes. After their meeting, Mansour agreed to focus more attention on developing bilateral economic and political ties. Closer ties with Egypt are crucial for Jordan, which saw imports of Egyptian natural gas fall precipitously under Morsi’s rule, sparking political unrest at home. However, while warmer political ties between the two countries are sure to follow the fall of the Muslim Brotherhood, Egypt’s inability to control the Sinai may continue to have a devastating impact on Jordan’s economy.

Energy-starved Jordan imports around ninety-seven percent of its energy needs, with Egypt’s Arab Gas Pipeline (AGP) serving as the Hashemite Kingdom’s principle source of natural gas. The main conduit runs from Arish in Egypt to Aqaba in Jordan through the Sinai Peninsula, a historically restive region of Egypt. Sinai militants have repeatedly attacked the gas pipeline there, leading to disruptions that cost Jordan around 2 billion dollars last year.

Following the Egyptian revolution there were frequent disruptions in the flow of gas from Egypt to Jordan, straining their already frosty relationship. The pipeline was bombed fifteen times in 2011 and 2012. Pipeline exports consequently fell from 193 billion cubic feet in 2010 to 64 in 2011, to 19 in 2012. Such disruption has translated directly into greater economic hardship and indirectly into greater political discontent in Jordan. Sabotage has cost the Jordanian government more than one million dollars per day at certain points, forcing it to occasionally lift energy subsidies. Such a move sparked unprecedented nationwide protests in the Kingdom in November 2012 with the first-ever calls for Abdullah’s ouster.

While militant activity was a main contributor to the decrease in exported gas, other factors also played a role. Jordanian officials suspected that Morsi’s government, with its ties to the Muslim Brotherhood, cut natural gas exports in November 2012 in order to foment instability and to pressure Jordan into adopting an anti-Assad stance with Syria. Egyptian officials maintained that the decrease was due to increasing domestic demand and widespread fuel shortages. However, the sudden end to fuel shortages in Egypt following the coup suggests that the shortage was indeed partly manufactured in order to destabilize Morsi.

In the wake of Morsi’s ouster, Egypt’s new leadership will most likely decrease or stop the manipulation of energy for political gain. The current secular interim government is less likely to use natural gas as political leverage, at least in terms of Syria, since it will have less of a personal stake in the outcome of Syria’s civil war.

Nonetheless, Jordan will likely continue to receive lower levels of natural gas as Egypt endures genuine, not just manufactured, fuel shortages. Egypt has experienced rising domestic energy demands and began importing natural gas for the first time in December 2012.

Now that Morsi has been removed, militants in Sinai are likely to step up their attacks on the pipeline. They attacked the pipeline on July 6, the first time in almost a year. Unless the Egyptian military can effectively control insurgent activity in Sinai and halt attacks on the natural gas pipeline, Jordan will continue to suffer energy shortages and will have to settle for more expensive options elsewhere. Egypt’s ability to quell the violence in Sinai remains far from certain, especially since the military now faces a much more militarized peninsula.

The region became more militarized when North Sinai experienced a security vacuum after President Hosni Mubarak was overthrown two years ago, allowing local Bedouin insurgents and Islamist supporters to take control of the region. Morsi’s neglect of the region offered residents a taste of freedom unknown during the Mubarak era. Since Egypt’s military removed Morsi on July 3, North Sinai militants have launched attacks on the military and police, killing dozens. Bedouin leaders told the Washington Post: “As much as the Sinai insurgency derives from militant anger at Morsi’s ouster, it is also a preemptive backlash rooted in fear.”

So far, the Egyptian military seems inclined to take on this insurgency challenge. On July 27, Egypt launched Operation Desert Storm and sent more troops to Sinai to suppress the violence. However, while Israel has made exceptions to the military limitations in its peace treaty with Egypt and allowed several Egyptian battalions to patrol Sinai, the Egyptian military by no means wields overwhelming force in the region. Even with previous unrest Israel did not broaden the agreement to allow full deployment of Egyptian troops. Limitations on Egypt’s military presence seem likely to continue.

Jordan has warmly welcomed the military takeover in Egypt since it helped put Islamist parties in Jordan and throughout the region on the defensive. However, decreases in Jordan’s share of Egypt’s plentiful supply of natural gas could also put the Jordanian government on the defensive. Abdullah himself has said that the “the discontinuation of the natural gas supply from Egypt” would deal the “harshest blow” to Jordan’s economy. With demand outpacing supply, Jordan’s government is considering increasing electricity prices by fifteen percent. The result could be public outcry, demonstrations, and renewed instability. If so, and especially if Sinai militants continue to impede natural gas exports, then the economic benefits of political rapprochement between Cairo and Amman will be dramatically overshadowed by the negative ripple effect of fuel shortages.

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