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Is it just my imagination or does the supply to the Axis in Africa increase with just an vigorous attack on Malta?
I have not taken it yet but my supply has increased enough to allow me to get to Cairo in good shape for a final assault.
The best consequence of my Malta campaign has been to draw out the British fleet so I could eliminate it. The Royal Navy is down to a 1strengh submarine and a 3 strength Battleship.

Exactly. You do not have to take Malta. That's a waste of resources and time. Beat up on the Royal Navy, and then use one or two Italian BBs to keep Malta beaten down. It'll stop interfering with your supply lines; and soon Rommel will be in Teheran, and The Italians will have taken out the Saudis.

If you've taken Malta it would help your supply in North Africa, but otherwise there must be a different reason. More HQs with your forces perhaps?

Or maybe the Italians would get another tank unit to use in North Africa.