The Washington Diplomat - Ambassador Motaz Zahran: Egypt pays dearly for US-led war on Iran - ByLarry Luxner - May 29, 2026 0

 The Washington Diplomat

Ambassador Motaz Zahran: Egypt pays dearly for US-led war on Iran

ByLarry Luxner -May 29, 2026 0

Ambassador Motaz Zahran: Egypt pays dearly for US-led war on Iran

Motaz Zahran, Egypt's ambassador to the United States. (Photo by The Washington Diplomat)

The Trump administration’s war on Iran has sparked massive retaliation throughout the Middle East, with the Iranian regime attacking not only Israel, but also Azerbaijan, Bahrain, Iraq, Jordan, Kuwait, Qatar, Oman, Saudi Arabia, Syria, Turkey and the United Arab Emirates.

Yet Egypt—the largest Arab country with nearly 120 million inhabitants—hasn’t received a single Iranian missile or drone, despite its close ties with Washington. Even so, the war threatens to derail Egypt’s economy, said Motaz Zahran, Cairo’s veteran ambassador to the United States.

And that could spell trouble for an important US ally, Zahran hinted in a lengthy interview with The Washington Diplomat.

Within two weeks of the initial US-led attack on Iran, he said, Egypt saw roughly $4 billion in capital flight, rising to $7 billion by the third week. And after a month of war, that number had surpassed $10 billion. At the same time, annual Suez Canal revenues are predicted to fall from nearly $11 billion in 2025 to between $3 billion and $4 billion this year.

“That’s basically a 70% decline in revenue simply because maritime commerce has been diverted to using other alternatives,” he said. “At the same time, tourism is projected to plummet by 40%—and that’s a big deal for a country that gets most of its revenue from tourism.”

The “Red Sea Enterprise” containership transits Egypt’s Suez Canal near Ismailia. (Photo by Larry Luxner)

Zahran noted that for every $1 increase in the price of a barrel of crude causes Egypt’s deficit to rise by one billion Egyptian pounds (nearly $19 million).

As if that’s not enough, remittances from Egyptian workers in the Persian Gulf have also fallen dramatically as people flee the region in the face of continued Iranian attacks, particularly on oil refineries and other infrastructure in the wealthy Gulf states of Saudi Arabia, Qatar and the UAE.

“From the very beginning, we stood by our brethren because Iran had made the mistake of attacking them. We were left with no choice,” Zahran said. “But at the same time, we’re moving ahead with mediation efforts in order to install calm and tranquility on both sides.”

Zahran said the Trump administration’s long-term goal generally reflects that of the international community: an Iran without nuclear capability that can no longer intimidate its neighbors.

“Almost every country in the region has gotten hit. Egypt is probably not on the target list for many reasons. One is that Egypt has always been a linchpin of peace, security and stability,” he said, adding that despite the world focus on Iran, it’s hardly the only hotspot in the Middle East.

Bloodshed continues to rip apart Sudan, he noted, while Iraq “is still basically trying to evolve under a new banner.” Fighting continues to rage in Syria and Libya is “still in shambles” nearly 15 years after the ouster and killing of longtime dictator Muammar Qaddafi.

“For Egypt, the United States will continue to be our No. 1 partner of choice worldwide,” he said. “Even if the US has a policy of ending what has been labeled as forever wars, it still needs to be present—if not with boots on the ground—via stronger partnerships throughout the region.”

Top recipient of US aid expects money to keep flowing

Egypt is the world’s second-largest recipient of US aid after Israel, receiving $1.3 billion a year since 1987, mostly in military assistance. The aid continues despite longstanding concerns raised by human rights organizations about Egypt’s record on political freedoms and civil liberties.

In Freedom House’s Freedom in the World 2026 report, Egypt received a score of 18 out of 100 points.

“President Abdel Fattah al-Sisi, who came to power following the military’s 2013 removal of President Mohamed Morsi, has governed Egypt in an increasingly authoritarian manner,” the watchdog said.

“Meaningful political opposition is virtually nonexistent, as expressions of dissent can draw criminal prosecution and imprisonment,” the report said. “Civil liberties, including press freedom and freedom of assembly, are tightly restricted.”

Responding to such criticism, Zahran acknowledged that when it comes to human rights, Egypt’s track record is far from perfect—but said his government is doing something about it.

“For the first time in our history, we’ve adopted a basic strategy that protects human rights and pinpoints all the loopholes in the system,” he stated. “This is basically the beginning of solutions, to recognize where you have problems. That has never been the case in the Egypt of the past.”

To that end, he said, the al-Sisi government “recognizes the need to reform our detention systems because of pretrial detentions that have falsely been portrayed abroad as political prisoners. We’re entering towards the end of the first five years of the reform’s first phase, and we will be issuing another. We’ll be opening a wider national conversation to launch the second five-year phase.”

Cairo, Egypt on Sept. 29, 2025. (Shutterstock)

Yet Zahran rejected the idea that US-style democracy is the answer for the ills of the Arab world.

“If Western democracy were the optimal way of ruling and governing, then it would be emulated anywhere around the globe. Sadly, it isn’t,” he said.

“In Egypt’s case, for example, our democracy is predicated on a system of governance that is a hybrid between presidential and parliamentary. Ever since 1952, that seems to have been the modus operandi that has catered to the will and to the aspirations of the Egyptian people. But we would never go to another country and impose our model on them. It’s up to their people.”

He also said US assistance will continue to flow to Egypt, just as it has at roughly the same level for the past 40 years.

“This aid is derived from our peace treaty with Israel. It will continue to flow, and to cater to Egypt’s economic and military needs,” he said. “We don’t see any reason for that to change.”

At least officially, Egypt hasn’t given up on 2-state solution

A former ambassador to Canada and India, Zahran is a seasoned diplomat who previously spent four years in Washington as a political counselor, congressional affairs officer and charge d’affaires at the Egyptian Embassy here. He’s also advised the foreign minister on the Mideast peace process, specifically the Israel-Palestine issue.

Zahran’s expertise is nuclear disarmament, nonproliferation and security. As such, he belongs to the UN’s Advisory Board on Disarmament Matters and its Institute for Disarmament Research. He was appointed to his current post as ambassador in September 2020.

Zahran said that over the past 20 years, it was always Egypt that de-escalated tensions between Israel and Hamas whenever fighting broke out in the Gaza Strip—which Egypt controlled from 1948 until the Six-Day War of 1967. That pattern has repeated itself four or five times, he said, until the atrocities of Oct. 7, 2023, “which was something completely new that we’ve all condemned.”

That attack, which killed 1,200 Israelis living in kibbutzim and other communities close to the border with Gaza, sparked a much wider war that to date has left more than 75,000 Palestinians and 2,000 Israelis dead, and the infrastructure of Gaza largely devastated. Widespread suffering has resulted, though Israel continues to dispute Palestinian claims of a genocide.

“Egypt does have a peace treaty with Israel, but that doesn’t mean we shy away from calling a spade a spade whenever necessary and appropriate,” Zahran said. “Any border has two sides. Our side is controlled by Egypt. The other side was controlled by Gazans. Today, it’s occupied by Israel, but during the past two years at least, the border has been rendered inoperable. As such, the continuous flow of goods into Gaza has been disrupted.”

Despite the current standoff, Zahran said Egypt continues to push for two states for two peoples.

“All along, we’ve been advocates of a two-state solution. As I’ve always said, I don’t see any other alternative,” he explained. “If it’s a one-state reality, the demographic factor alone will ensure that a Palestinian state will not only emerge, but dominate. That doesn’t contribute to Israel’s future security. It would be a grave mistake, and will only bring about continued cycles of violence and upheaval.”

After 6 years as ambassador, what’s next?

Asked if Hamas can be part of the solution, Zahran said that’s up to the Palestinians themselves. While sidestepping a question on whether peace is possible with Netanyahu still in power, he did blame the current government for blocking humanitarian aid into Gaza.

“We’re stuck somewhere in between phase one and phase two. We know why, and we don’t shy away from saying why we’re stuck,” he told us. “Israel continually obstructs more humanitarian aid into Gaza and doesn’t allow basic equipment necessary for the early recovery schemes that are prelude towards future reconstruction.”

One thing Egypt will not tolerate, he said, is an opening of its border with Gaza to allow thousands of impoverished Gazans to pour into Egyptian territory, destabilizing the country.

“If we had waves of Palestinians leave their homeland, come into Egypt and continue their struggle, we will be dragged into the conflict,” he warned. “Is this in anyone’s interest? The answer is basically no. Otherwise, the peace treaty will vanish. We see no logic in that.”

A pumpjack moves up and down in an oil field in South Sinai, Egypt on Feb. 1, 2026. (Shutterstock)

We asked Zahran what the fallout would be from the UAE’s April 28 decision to pull out of OPEC—the once-feared global petroleum cartel—as a result of the recent upheaval in oil prices.

“The UAE was the most targeted country in the Gulf, and they need to reconstruct,” he said. “How will Egypt be affected? I really don’t know. It depends on decisions to be taken within OPEC itself to compensate by pumping more oil. If prices come down, we’ll be better off.”

Now approaching six years on the job, Zahran said he has no idea how long he’ll remain here in Washington.

“Our terms are four years. If you’re extended, you’re extended for a reason,” he said. “I’ve probably exhausted the reasons for which I’ve been extended. I can leave today or tomorrow. I just don’t know.”

Victor Shiblie contributed to this report.