Egypt vs. Saudi Arabia—The Subtle Dispute Reshaping the Middle East

The most transformative Middle East developments often arrive unheralded. The Cairo-Riyadh estrangement is one such shift. Whispers of a fundamental dispute have burst into public view, fracturing one of the Middle East and North Africa’s most pivotal alliances. This rupture, rooted in a clash of governing philosophies, is accelerating regional fragmentation.

The core tension is a philosophical clash between leaders. Saudi Crown Prince Mohammed bin Salman’s Vision 2030 champions economic diversification and meritocratic reform—a direct challenge to Egyptian President Abdel Fattah el-Sisi’s model of top-down authority and military-dominated economics.

This divergence crystallized in practical policy. Saudi Arabia grew frustrated with what it perceives as Egypt’s exploitation of Gulf generosity without meaningful reform. Between 2013 and 2019, Riyadh provided Cairo with approximately $25 billion in financial aid—a lifeline President Sisi admitted saved Egypt from “drowning.” By 2023, however, Riyadh had completely shifted to a Saudi Arabia First policy, demanding economic reforms for further support. The contrast is stark: Saudi pursues aggressive privatization while Egypt’s military-dominated economy has accumulated a crippling $168 billion in debt.

The relationship has transformed into instrumental leverage. Saudi Arabia holds existential cards over Egypt’s fragile economy. An estimated 2.3 million Egyptian expatriates in Saudi Arabia send home billions in annual remittances. Remittances account for an estimated 44–61 percent of Egypt’s foreign exchange reserves, primarily fueled by its expatriate community in Saudi Arabia—the largest Egyptian diaspora abroad. The “Saudization” program threatens millions of these jobs, and massive reversible Saudi investments hang in the balance as a coercive tool.

Despite a projected GDP growth of 4.7 percent for 2026, Egypt’s economy remains fundamentally vulnerable. This renders it susceptible to Riyadh’s leverage, demonstrated by its readiness to divert investment to Syria’s new President Ahmed al-Sharaa despite Cairo’s protests.

The rift is most visible in contradictory approaches to regional conflicts. When Israeli Prime Minister Benjamin Netanyahu jokingly alluded to a Palestinian state on Saudi territory, Egypt’s foreign ministry issued an unusually strong statement defending Riyadh’s sovereignty. This performative solidarity was not appreciated by Saudi commentators who argued Egypt exaggerated the seriousness of Netanyahu’s comments in a bid to drag Saudi Arabia in a confrontation with the Israelis for political reasons.

The dispute has paralyzed multilateral Arab collaboration. Egypt, historically the Sudanese army’s closest ally, reiterated the “importance of preserving Sudan’s national institutions”—a position directly opposed to the United Arab Emirates’ call for excluding what Emirati state-linked commentators argued is a “Muslim Brotherhood-led army.”

Most importantly, the Egyptian-Saudi conflict escalated through state-linked media campaigns. Egyptian influencers linked to intelligence fronts launched vicious personal attacks, including ethnic slurs, against the Saudi royal family and graphic insults targeting the crown prince. Saudi journalists responded in kind, with one reportedly linked to the Saudi crown prince predicting the end of President Sisi’s rule and potential imprisonment by 2026. This public vitriol signifies a point of no return.

Beneath the immediate conflict lies a deeper ideological schism. MBS’ modernization vision challenges the Nasserist model that has dominated Egypt for decades. Across youth-led Arab societies, Riyadh’s pragmatic blueprint is overshadowing Cairo’s nationalist discourse and even reshaping notions of Arab identity, with Saudis increasingly contending that Egyptians are not Arab per se but North African Arabic-speakers and as such can’t claim, or wish, to lead the Middle East.

This confrontation signals a fundamental realignment. The erosion of cooperation fragments collective Arab action on critical issues from Gaza to Nile water disputes, accelerating regional conflicts into competing spheres of influence.

President Sisi faces an unsolvable dilemma: collapse is possible without Gulf lifelines, but acquiescing to Saudi demands for reform—specifically of the military’s economic empire—threatens the regime’s very foundation.

The coming years will likely witness calibrated escalation—restrictions on labor, investment redirection, media warfare—while avoiding complete rupture. Saudi Arabia recognizes that Egyptian collapse would create unacceptable regional instability, while Egypt understands outright confrontation would accelerate its economic decline.

Yet as both nations continue their collision course, the broader Middle East faces a precarious transition. Ultimately, this silent rift may prove more transformative for the region than any of the dramatic revolutions or wars that have dominated headlines in recent decades.

*Khaled Hassan is an Egyptian British national security and foreign policy expert and council member of Israeli President Isaac Herzog’s Voice of the People initiative.

Source: https://www.newsweek.com/egypt-vs-saudi-arabia-subtle-dispute-reshaping-middle-east-opinion-2126443