Gaza's smuggling economy booms as Israel's restrictions push prices skyward
An investigation reveals a thriving smuggling network in Gaza, with cigarettes, fuel and medicine entering illegally as prices soar and multiple parties profit.
A thriving underground trade has emerged in Gaza, driven by Israel's tight restrictions on goods entering the territory. An investigation based on court documents and interviews with traders, truckers and officials reveals that smuggling has become a lifeline for residents, but also a source of profit for a wide network of middlemen, including Israeli soldiers.
Cigarettes and tobacco, banned since the war began in October 2023, are the most lucrative contraband. A single pack can sell for as much as $140, and prices exceeded $1,000 during Israel's total blockade. Other items, from iPhones and solar panels to fuel and anesthetics, are also smuggled in. Israel restricts or bans many goods, classifying them as "dual use," claiming they could be repurposed for military functions.
The investigation found that smuggling rings, which have long operated around the Israeli blockade, now pull in millions of dollars. Payoffs are made to Israeli troops, drivers, warehouse workers and others on both sides of the border. One trader said, "The occupation has left no other option before us. Smuggling has become routine."
The Israeli military said it takes smuggling seriously and works to prevent it, adding that any suspected involvement by its personnel is examined according to the law. Gaza's Hamas-led government also profits, taking a cut of up to 20% of the price of smuggled goods if merchants report them, and up to 80% if they are discovered unreported.
While humanitarian aid enters through the Kerem Shalom crossing, smugglers use both that route and military corridors, bribing soldiers to facilitate passage. Trucks belonging to aid groups are also sometimes used. The costs of these bribes and payments are passed on to consumers, with a vehicle battery now costing over $2,300, compared to $140 before the war.
Smuggling has become vital to Gaza's economy, with top merchants estimating it makes up over half their operations and more than 70% of profits. Hospitals and government agencies also rely on smugglers for medicine, fuel and spare parts. The trade has flourished as the legal flow of goods remains far below prewar levels, leaving residents with few options but to pay inflated prices for everyday items.