Israel-Europe gas deal will transform European geopolitics and energy security

Israel is becoming a major player in the global energy scene and directly threatens the Russian economy and influence in Europe

Comment

This week, Israel officially positioned itself as a natural supplier to Europe, one of the largest markets in the world.

The announcement of an agreement signed by Israel, Egypt and the European Union on June 15 during the Eastern Mediterranean Gas Forum will be a huge deal for Europe and Israel. Europeans’ drive to find alternative sources of natural gas is a direct result of Russia’s invasion of Ukraine.

A big deal for Europe and Israel

For decades, Europe has relied on Russian natural gas and Russia’s good graces for energy. Moscow has repeatedly cut off gas to European nations at will in order to influence policy.

Gaining new access to Israeli natural gas allows it to move away from Russia as a source of energy, especially for its natural gas supply.

It’s also huge progress for Israel, as it is tapping its Leviathan natural gas fields just off its coast in the eastern Mediterranean as an entry into a global energy supplier. The transmission plan is simple and will allow gas exports to begin earlier than planned.

A change of plans

Initially, the long-term plan had been to build a gas pipeline linking the eastern Mediterranean gas fields to Cyprus, then to Greece, then to Western Europe. These plans were disputed by Turkey, which claims ownership of the natural gas. He also claimed territorial rights over any pipeline crossing Cyprus or crossing the shipping line that Turkey and Libya have claimed exists between their two countries.

But according to the new agreement, no new pipelines will have to be built, at least not right away. Instead, the plan is to use existing pipelines that connect Israel and Jordan to Egypt’s liquefied natural gas facilities. From there, liquefied natural gas (LNG) will be transported directly to European markets via existing shipping lanes to European port(s) within a few years.

Israel’s gain is Russia’s loss

As LNG exports to Europe increase over the next two years, Israel will earn huge revenues from its European customers at the expense of Russia. Currently, Europe depends on Russia for around 40% of its natural gas supplies. In 2021, this represented $119 billion annual income from Europe to Russia. Revenue streams will be even higher as energy prices continue to rise. Natural gas is nothing less than a strategic asset, because it is the only the biggest part of Russian-European trade, including 36 percent of the country’s total budget.

The headquarters of Gazprom Germania, the German unit of Russian natural gas company Gazprom, in Berlin on March 30, 2022. (Sean Gallup/Getty Images)

A diplomatic victory across the Arab world

The deal is more than just an economic boon to Israel. This shows how Israel and its Arab partner, Egypt, can work together for mutual economic benefit.

This message of cooperation and mutual benefit will be seen and heard loud and clear in the Arab and Islamic world. It is not wishful thinking that Egypt’s cooperation will attract the same from other Arab nations that could benefit from better relations with Israel.

Moreover, when liquefied natural gas shipments start arriving in Europe, it will fundamentally change the balance of power between Russia and Europe.

Bad news for Russia

This is good news for Europe and Israel, but very bad news for Russia and Vladimir Putin. From an economic point of view, the impact of Europe abandoning Russia as a supplier of oil and natural gas will be catastrophic for the Russian economy.

Russia may need to quickly find new markets.

It should be noted that China already buys Russian energy, providing Russia with revenues that rival the European market, even at reduced prices– but it may not last forever.

But the Israeli-European gas deal is also very problematic for Russia from a geopolitical point of view. Without the power to swing or to punish With Europe threatened with cutting off its natural gas supplies, Russia will have little else left to influence European policy.

Indeed, Moscow understands this as well as anyone, which adds a level of complexity, if not risk, to the new deal.

How will Moscow react?

How, for example, will or could Moscow react to this development?

As noted, this could be seen as a threat to Russia, if not an act of economic warfare. It’s definitely not energy or food deprivation. in itselfbut the net effect could be similar.

Moscow could interpret the new natural gas deal in the context of the EU and Israel (two prominent critics of the invasion of Ukraine) cooperating – even conspiring – to deprive Russia of its most important market. important.

It’s true. And that could well cause great economic hardship for the Russians. Moreover, Russia’s geopolitical influence in Europe and the rest of the world would also diminish.

Would Moscow adopt a wait-and-see attitude towards Israel and the European Union, hoping that it would manage to convince one or the other of the parties not to conclude the agreement?

Or would it resort to a naval blockade of natural gas shipments to Europe to protect its economic interests?

Much may depend on the state of the outcome of Russia’s war against Ukraine, which is not easily predictable. But once Europe is rid of Russian gas, it will no longer be hostage to Russian blackmail, even if it still risks being harassed militarily by Moscow.

This same reasoning also applies to Israel, and it is acutely aware of Russia’s military presence on its northern border. More war from Russia over this deal could be in the cards.

After all, what other card does Russia have to play?

The opinions expressed in this article are the opinions of the author and do not necessarily reflect the opinions of The Epoch Times.

James Gorrie

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James R. Gorrie is the author of “The China Crisis” (Wiley, 2013) and writes on his blog, TheBananaRepublican.com. He is based in Southern California.

Mary I. Bruner