Geopolitical Risk and Energy Security in Egypt: Evidence from 2000–2023

This study examines the dynamic impact of geopolitical risk (GPR) and renewable energy consumption (RENE) on energy security in Egypt from 2000 to 2023. Given the increasing regional instability and Egypt’s strategic pivot toward a green economy, this research employs the Autoregressive Distributed Lag (ARDL) bounds testing approach, which is robust for small sample sizes and mixed integration levels. The empirical results provide preliminary evidence of a long-run negative relationship between geopolitical risk and energy security (coefficient: −11.92), suggesting that external political shocks may act as a deterrent to energy stability. Conversely, renewable energy is found to exert an indicative positive influence (coefficient: +1.17) on the energy security index. Notably, these long-run coefficients are significant at the 10% level, implying that while these variables represent emerging structural trends, they remain sensitive to high regional volatility and the evolving nature of the Egyptian energy sector. Diagnostic tests, including Jarque–Bera (0.92) and Breusch–Pagan–Godfrey (0.94) tests, support the model’s reliability, while CUSUM and CUSUMSQ tests indicate general parameter stability. The study suggests that while renewable energy integration shows potential for enhancing resilience, its current scale may not yet be sufficient to fully counterbalance the potential pressures of geopolitical shocks. Policy implications point toward the strategic value of “geopolitical hedging” through continued green investment, the expansion of strategic reserves, and the adoption of de-risking financial instruments like Green Sukuk to support long-term energy sovereignty as a precautionary measure.