Egypt’s cautious neutrality amid the broader US-Israeli-Iran conflict has shaped trader views on the likelihood of direct Iranian targeting. A July 2026 drone strike on the Damietta port, which caused collateral damage to vessels, marked the most recent verifiable incident involving Iranian assets on Egyptian territory. Since then, Cairo has repeatedly condemned Iranian missile and drone attacks on Gulf states while urging de-escalation, Red Sea security, and adherence to international norms. Diplomatic contacts between the two governments have continued at a low level but remain stalled, with no exchange of ambassadors and Egypt prioritizing coordination with Gulf partners. Upcoming regional summits and any further Iranian responses to strikes on its territory could influence escalation risks.