Of course, any hope of axis victory cames through the seizure of Suez. In OTL, with Gibraltar and Malta in british hands, the germans and italians came close, up to El Alamein, very near Alexandria, the last major british naval base. So I assume that with Gibraltar (and then Malta) in axis hands, and U-boat bases in Spain, they would have a much better chance to do so.
Close in terms of distance does not equate to close in terms of real chances, as a look at the logistical situation of the two sides at the time of that closeness will tell.