​This study examines the explanatory power of realism in the context of the Grand Renaissance Dam crisis between Egypt and Ethiopia, drawings on concepts from deterrence theory, and the counter hegemonic challenges posed by revisionist states. It adopts a broader understanding of hegemony incorporating the concept of hydro- hegemony, where Ethiopia's behaviour is seen as a direct challenge to Egypt's established hegemony in the Nile Basin. The study concludes that the dam crisis illustrates both the strength and weaknesses of the realist perspective. On one hand, it affirms realist assumptions regarding the significance of power dynamics, alliance building, conflict of interests, relative gains, and the influence of the international system on state behavior. Conversely, the crisis also reveals the limitations of realism, particularly its to overlook internal factors and the importance of non-material sources of power in advancing states' interests and reinforcing their hegemony.