Israel Shuts Leviathan Gas Field Amid Iran Conflict, Threatening Mediterranean Supply Chains
Chevron halted production at the 1.2 bcf/d field following government order, cutting 60% of Israel's gas output and disrupting exports to Egypt and Jordan as regional energy infrastructure faces mounting security risks.
Israel has ordered Chevron to suspend operations at the Leviathan natural gas field, the country’s largest offshore reserve, as a precautionary measure following joint US-Israel military strikes on Iran that began February 28. Chevron declared force majeure at the field, which has the capacity to handle up to 1.2 bcf of gas per day, effectively freezing exports that accounted for 90% of the field’s production to Egypt and Jordan as of 2024.
The shutdown comes as Iran launched retaliatory missile and drone attacks on Israel, the UAE, Qatar, Kuwait, Bahrain, Jordan, and Saudi Arabia following strikes that killed Iranian Supreme Leader Ali Khamenei. Israel’s energy ministry also instructed Greek firm Energean to temporarily suspend production at its offshore Karish gas field, compounding supply disruptions across the eastern Mediterranean. The timing is particularly acute: the suspension comes just after the Leviathan consortium approved stage 1 of a $2.36 billion project to raise production capacity to about 21 billion cubic meters a year by 2029.
Egypt Bears Immediate Brunt
Egypt, which has struggled with declining domestic gas generation, producing just 31.8 bcm in the first nine months of 2025—the second-lowest total since 2016, faces the most immediate disruption. The field sold 8.1 billion cubic meters to Israel, Egypt, and Jordan in the first nine months of 2025, with Egypt accounting for more than half at 4.8 bcm. According to Rigzone, analysts at Wood Mackenzie expect Egypt to increase liquefied Natural Gas imports to offset losses from the suspension.
The crisis exposes Egypt’s reversal from regional LNG exporter to net importer. Egypt’s ambitions to be a regional gas hub have reversed over the past couple of years, turning it into a net importer due to declining production at major fields like Zohr coupled with surging domestic demand, according to OilPrice.com. Israeli gas had become critical infrastructure: Israeli gas accounts for about 15% to 20% of Egypt’s consumption, per data from the Joint Organisations Data Initiative cited by The Times of Israel.
Israel and Egypt signed a historic 15-year, $35 billion supply deal in August 2025 for 130 billion cubic meters of natural gas from Leviathan through 2040—the largest export agreement in Israeli history. The first phase was scheduled to begin in 2026, but the field’s closure has now frozen implementation indefinitely.
Europe’s Mediterranean Alternative Stalls
The shutdown undermines European efforts to diversify away from Russian gas by tapping eastern Mediterranean reserves. Israel, Egypt, and Cyprus have emerged as promising sources for Europe, with exploration in deepwater basins resulting in the discovery of approximately 2,400 billion cubic meters of gas resources, according to research from Columbia University’s Center on Global Energy Policy.
Israeli gas reaches Europe indirectly: exported cargoes of liquefied Egyptian and Israeli gas have helped cover the EU’s loss of Russian gas, with Egypt being the only Eastern Mediterranean country with LNG export capacity. But the model depends on pipeline flows from Israel to Egyptian liquefaction plants—precisely what the Leviathan shutdown has severed. Israel, Egypt and Cyprus, because of their significant offshore gas reserves, make the Eastern Mediterranean region a strategic partner for the EU in its effort to diversify its gas supply routes, the European Commission has stated.
- Mediterranean gas now exposed as vulnerable to same regional conflicts it was meant to circumvent
- Europe’s REPowerEU strategy to eliminate Russian gas by 2027 loses a key alternative supply pillar
- Egypt forced into costly emergency LNG procurement, tightening global gas markets already strained by winter demand
- Jordan’s Energy Security compromised—the kingdom received 2.71 bcm from Leviathan and produces minimal domestic gas
Broader Regional Energy Infrastructure Under Threat
The precautionary shutdowns signal a fundamental shift in how energy operators assess risk in the eastern Mediterranean. The Haifa refinery was severely damaged in a missile attack during the 12-day war between Israel and Iran in June 2025, according to Argus Media, establishing precedent for physical damage to critical installations. This time, the Haifa refinery operator Bazan shut down some unspecified units before any strikes occurred.
Oil markets have repriced the conflict risk premium sharply. Brent surged to $73 a barrel on Friday, hitting levels not seen since July, with over-the-counter prices quoted between 8% and 10% higher—sitting near $80 a barrel on Sunday, per TS2.tech. The wider threat looms over the Strait of Hormuz, where roughly 30 percent of the world’s seaborne crude oil transits. Since the war began on Saturday, there has been a sharp drop in vessel traffic through the strait, with the number of vessels idling surging as shipowners grow increasingly concerned about maritime security risks, according to Kpler’s senior crude oil analyst quoted by Al Jazeera.
| Region | Daily Gas Flow | Current Status | Global Impact |
|---|---|---|---|
| Leviathan Field | 1.2 bcf/d | Suspended | Egypt/Jordan supply halt |
| Strait of Hormuz | ~20 million bbl/d oil | Reduced traffic | 20-30% global oil supply |
| Egyptian LNG plants | Variable (import dependent) | Feedstock disrupted | EU alternative supply constrained |
Energy as Geopolitical Lever
Israel’s use of energy exports as strategic leverage with Arab neighbors now cuts both ways. Israel’s natural gas exports to Egypt and Jordan rose by 13.4 percent in 2024, according to the country’s Energy Ministry cited by the Foundation for Defense of Democracies, demonstrating energy’s role in maintaining regional relationships despite political tensions. The shutdown reverses that dynamic, turning energy from stabilizer to vulnerability.
Chevron’s position is particularly delicate. Leviathan working interest owners include Chevron Mediterranean Limited as operator (39.66%), NewMed Energy (45.34%), and Ratio Energies (15%), according to the company’s own press release. The timing could not be worse: Chevron had just weeks earlier committed to the multi-billion dollar expansion, projecting confidence in regional stability. The force majeure declaration protects the consortium from contractual penalties but offers no timeline for resumption.
What to Watch
The duration of the suspension will determine whether this represents a temporary precaution or a structural reassessment of eastern Mediterranean gas reliability. Egypt’s emergency LNG procurement decisions in the coming week will signal how long Cairo expects the disruption to last. European gas prices, which surged up to 6.6% within hours of the Leviathan shutdown announcement according to Yahoo Finance, will test whether Mediterranean gas can ever be considered a stable Russian alternative if subject to similar geopolitical shocks.
Chevron’s next earnings call will reveal whether the company maintains its eastern Mediterranean expansion plans or begins hedging exposure to a region where President Trump told the Daily Mail that the conflict with Iran could go on for the next four weeks. For Europe, the question is more fundamental: if the solution to dependence on Russian pipelines is LNG and Mediterranean gas, but both are now constrained by conflict and infrastructure vulnerabilities, what remains of the REPowerEU diversification strategy? The Leviathan shutdown has made that question uncomfortably urgent.