Down and out from Rabat to Cairo: The Iran war and North African instability

Summary — “Down and out from Rabat to Cairo: The Iran war and North African instability” (ECFR, Tarek Megerisi, 15 July 2026)

With the US-Iran war reigniting after a July 8 US strike, this commentary tracks how the conflict is pushing an already fragile North Africa toward polycrisis. The renewed closure of the Strait of Hormuz and rising fuel prices are hitting import-dependent economies hard: Tunisia nearly depleted its emergency reserves and Egypt was forced into costly spot-market energy purchases and rolling blackouts during the war’s first wave earlier this year. Beyond energy, exports of urea and sulphur — critical fertiliser inputs for Morocco’s phosphate industry, Egypt’s fertiliser sector and Tunisia’s phosphate exports — have been disrupted, worsening food insecurity in a region that imports over half its food. Longer-term risks center on remittances and Gulf investment, North Africa’s two biggest foreign-currency sources: Gulf-based labour income to Egypt, Morocco and Tunisia (worth 8-12% of GDP in each) and UAE-driven FDI are both vulnerable to fallout in Gulf economies. The piece also flags rising instability — protests in Tunisia and Morocco, a widening Algeria-Morocco rivalry (with Algeria gaining leverage via energy exports and a new Maghreb union excluding Morocco), and stalled political deals in Libya. The author argues this crisis is also an opportunity for Europe to deepen ties with North Africa via the EU’s Mediterranean Pact — through Special Drawing Rights loans, an extended food/resilience facility, and longer-term investment in green power and Global Gateway infrastructure — warning that passivity would squander a moment for strategic engagement.

The war between the US and Iran is destabilising North African economies, putting an already fragile region at the very edge of polycrisis