A New Direction in Egypt-Iran Relations? Not So Fast

On September 9, Iranian Foreign Minister Abbas Araghchi signed a technical agreement with the International Atomic Energy Agency in Cairo that restarted his country’s cooperation with the world’s leading nuclear watchdog. The move marked a remarkable about-face after Iran suspended cooperation with the United Nations nuclear monitoring body following U.S. and Israeli airstrikes against its nuclear facilities in June. Egyptian Foreign Minister Badr Abdelatty stated that Cairo had engaged in “intensive” diplomatic efforts to help broker the agreement.

Diplomatic relations between the two countries have been strained since the 1979 Islamic Revolution, when the newly formed Islamic Republic severed ties with Egypt after it granted asylum to the deposed Shah of Iran. Tensions escalated in the 1980s as Egypt sided with Iraq during the Iran-Iraq War and deepened further when Iran memorialized Sadat’s assassin. A brief exception occurred during the Muslim Brotherhood era of 2012–2013, when President Mohamed Morsi visited Tehran and hosted then-Iranian President Mahmoud Ahmadinejad in Cairo, marking the first such visit since 1979.

Over recent months, Cairo’s mediation efforts in Iran’s nuclear file follow a noticeable diplomatic thaw in the bilateral relationship. On June 2, Araghchi made his third visit to Egypt since his appointment in August 2024, meeting with President Sisi to discuss regional developments and exploring avenues for strengthening ties. In December 2024, Iranian President Masoud Pezeshkian attended  the D-8 Summit in Egypt—the first visit by an Iranian president since 2013. In July 2025, Tehran took a symbolic step towards reconciliation by renaming a street that once honored the assassin of former Egyptian President Answar al-Sadat, a move welcomed by Cairo .

The recent rapprochement between two former rivals is best understood as pragmatic engagement with clear limitations—not a broader strategic shift. Ideological differences on key regional issues, combined with stringent international sanctions on Iran, continue to constrain the relationship, leaving both sides to pursue limited cooperation in select areas only. Despite their frosty past, in the short term, both sides stand to gain economically and diplomatically from closer collaboration.

Short-Term Gains

The recent thaw in diplomatic ties with Iran could offer Egypt an opportunity to reduce pressures from Iran’s regional allies, which have exacerbated Egypt’s economic crisis. A key factor driving Egypt’s overtures toward the Islamic Republic is the threat to Red Sea maritime security posed by the Houthis, which have been attacking merchant and military vessels in the waters off Yemen’s coast since November 2023. Houthi attacks have severely impacted the Suez Canal’s annual revenue, which dramatically declined from $10.25 billion in 2023 to $3.9 billion in 2024. Given Iran’s backing for the Houthis, improved relations with Tehran could provide a channel for Cairo to push for de-escalation in the Red Sea. Cairo would not be the first country to approach Tehran with similar concerns; in January 2024, China reportedly pressed Iran to curb Houthi attacks in an effort to secure this critical maritime shipping route.

Closer ties with Iran could also boost Egypt’s tourism sector. Iranian Minister of Tourism and Culture Reza Salehi Amiri announced in May that his country would launch a cultural exchange program with Egypt, aiming to attract about one million Iranian tourists to Cairo during the next five years. Cairo is home to important Shia religious sites, namely Al-Hussain Mosque and the Sayeda Zeinab Mosque, making the city an attractive destination to many Iranian Shia. Considering that tourism accounted for roughly 8.5 percent of Egypt’s GDP in 2024, this exchange program could provide a significant boost to the country’s struggling economy. However, given Iran’s regional policy of exporting the ideology of the Islamic Republic—as demonstrated in Iraq, Lebanon, and Syria—Egypt’s security establishment is concerned that an influx of Iranian religious tourism could evolve into a vehicle for Tehran to expand its influence within Egypt, much as it has done elsewhere in the Middle East.

Politically, closer ties with Iran could enhance Egypt’s standing as a key regional player—ambitions reflected in Cairo’s recent mediation efforts on the Gaza conflict and the future of Iran’s nuclear program. Due to Egypt’s geopolitical clout and longstanding ties with the United States, closer diplomatic relations with Iran could grant Cairo an edge and position itself as a critical contributor to ongoing negotiations.

For its part, Iran may see closer ties with Egypt as an avenue to ease its regional and international isolation. The 12-day war with Israel in June, preceded by the collapse of the Assad regime in December 2024 and the decapitation of Hezbollah last year, have dealt a major blow to Tehran’s regional influence. Against this backdrop, Egypt has emerged as a valuable diplomatic partner. Closer ties with Cairo could help Tehran regain lost ground in the region while signaling to other countries that it has options for engagement beyond its traditional proxies and partners.

A Limited Partnership

Despite their positive trajectory, Egypt-Iran relations remain constrained by geopolitical realities. Egypt is closely aligned with the Gulf’s Arab monarchies—heavily reliant on their financial backing—and looks to the West for security assistance. Iran, by contrast, continues to position itself as an anti-Western revolutionary power that projects regional influence through proxies and non-state actors—some of which directly threaten Egyptian interests. These fundamental realities make a long-term partnership near-impossible.

In Gaza, Egypt serves as a mediator between Israel and Hamas, despite suspicions of Hamas’ Islamist ideology. Cairo views the ongoing war as a direct national security threat due to both the risk of refugee spillover into Sinai and the potential erosion of its 1979 peace treaty with Israel. Meanwhile, Iran has long backed Hamas and works with the group as a key member of its “Axis of Resistance.”

In Syria, Egypt was initially cautious of the nation’s new leadership, given its Islamist background. But Cairo has gradually made inroads with Damascus to retain influence and ensure friendly relations with post-Assad Syria. Iran, meanwhile, viewed Assad’s overthrow as a major blow to its regional influence and remains hostile toward the new government. Though Tehran recently signaled its willingness to re-engage with the new Syrian authorities when circumstances are right, it is too early to determine what form that outreach would look like.

On the economic front, while cooperation with Iran on maritime security and tourism may offer limited economic relief for Egypt, international sanctions against Iran make lasting, substantial economic engagement nearly impossible. In fiscal year 2025, Iran’s FDI inflows to Egypt were nonexistent and bilateral trade in 2023 totaled just $5.1 million—far below the lowest trade volume Egypt had with any Gulf state. These figures underscore the narrow scope of economic ties between Egypt and Iran and the mountain Tehran must climb to supplant the Gulf states as Cairo’s preferred partner.

Transactional but Not Transformative

The trajectory of Egypt-Iran relations highlights a mix of opportunity and constraint. While recent interactions between the two states demonstrate a willingness to test new avenues of cooperation, recent developments cannot erase decades of ideological rivalry and geopolitical jockeying. Rather, the recent diplomatic thaw appears to be a calculated move driven by the desire for short-term gains. For now, the engagement is largely transactional and limited in nature, and any rise in escalation in Gaza, Syria, or the Red Sea threatens to expose the fragility of the rapprochement.

At best, the Egypt-Iran thaw in relations represents a strategic pause in hostilities rather than a true reconciliation. At this rate, both sides are gaining immediate benefits—economic gains and a boost in recognition for Cairo and diplomatic breathing room for Tehran—without having to invest in deeper political or strategic compromises that could bring about a long-term change in relations. Without such compromises, the relationship is likely to remain a tactical maneuver necessary to survive a volatile region rather than the beginning of a new alignment.

The views and opinions expressed in this article are those of the authors and do not necessarily reflect the views of Gulf International Forum.