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Regional security in the Middle East: The creative force of energy diplomacy

  • Neil Quilliam

    Associate Fellow, Middle East and North Africa Programme, Chatham House

    زميل مشارك، برنامج الشرق الأوسط و شمال افريقيا

Energy diplomacy has proven to be highly effective at encouraging cooperation among hostile states and, in turn, enhancing overall regional security. Given the centrality of energy to the well-being of all states, energy diplomacy, when deployed deftly, can leverage common vulnerabilities, and stimulate shared economic interests. Indeed, when deployed creatively, it can make the impossible seem probable.  

This paper argues that Saudi Arabia should join the East Mediterranean Gas Forum (EMGF). Doing so would not only enhance regional energy cooperation but it could also introduce a fresh dynamic to multilateralism and lead to improved regional security. On paper, it seems most unlikely; however, the precedent for unlikely energy cooperation exists. The current global energy environment is also conducive to bringing together energy players that are keen to monetize assets, secure access to EU gas markets and shore up new gas reserves. And the October 2022 maritime border agreement between Lebanon and Israel in pursuit of financial gains has opened the door to wider energy cooperation. 

The building blocks for regional energy cooperation are already in place. There are at least four examples where creative energy diplomacy has led to cooperation among states, even in the most unlikely circumstances. Israel’s supply of pipeline (natural) gas to Jordan, while unpopular among the Jordanian population, has not only reduced Amman’s dependence on very expensive deliveries of liquefied natural gas (LNG) and, therefore, benefited the economy; but it has also compelled both countries to continue broader cooperation during times of political tension. In September 2016, an Israeli gas consortium, including the US-based Noble Energy and Israel’s Delek Group, signed a $10 billion deal with the Jordan Electric Power Company to supply it with 45 billion cubic metres (m3) of natural gas over 15 years, turning Israel into its largest gas provider.1

Similarly, US-sponsored energy diplomacy played a critical role in brokering a deal in 2020 between Tel Aviv and Cairo in exporting Israeli gas through Egypt’s underutilized LNG facilities. Although the move was unpopular among the Egyptian public, it helped Cairo to better secure its energy needs by utilizing its natural gas resources to meet domestic demand, while providing Israeli gas with an established route to market. It also helped the government of Egyptian President Abdel Fattah al-Sisi to fulfil its LNG obligations to international customers.2 In both cases, energy diplomacy helped Jordan and Egypt to achieve better energy security and secured Israel with access to a guaranteed market.

The Prosperity Green project commits Israel, Jordan and the United Arab Emirates (UAE) to building solar PV plants with a generating capacity of 600 megawatt (MW) in Jordan by 2026, with the clean power produced exported to Israel. With funding and technological expertise provided by the UAE’s Masdar, the deal will help Israel to meet its renewable energy targets and diversify its energy mix. Proceeds from the sale of electricity will be divided between Masdar and Jordan. In return, Israel has committed to provide Jordan with 200 million m3 of desalinated water, effective immediately, in a twin project known as Prosperity Blue.3 The agreement serves different purposes. For Jordan, it provides the kingdom with a critical resource. By encouraging a compromise between Jordan and Israel, especially on sensitive subjects, such as water, the UAE has showcased its value as a diplomatic broker. It also brings material benefits – water, finance and knowledge – to Jordan, and helps Israel to integrate itself further with Arab neighbours. Israel is able to reach its renewables targets, demonstrate its value to the UAE and also work constructively with Jordan in spite of ongoing tensions over Jerusalem.

The examples above laid the foundations for the game-changing US-brokered deal between Israel and Lebanon on maritime boundaries. In effect, that deal cleared the path for Lebanon to recognize Israel indirectly (without formal diplomatic recognition) and to reach a compromise that serves both countries’ economic interests.4 In other words, they were able to put aside hostilities and ideologies and, instead, participate in a mutually rewarding transaction even in the absence of normalized ties between the two countries.

Saudi Arabia and the East Mediterranean Gas Forum 

The prospect for establishing a regional agenda for energy cooperation, including Israel, Jordan, the Palestinian Territories and Saudi Arabia, holds promise. The East Mediterranean Gas Forum (EMGF), which comprises Egypt, Jordan, Israel, the Palestinian Territories, Greece, Cyprus, France and Italy, is a vehicle that could actively promote energy cooperation beyond its core membership.5 The inclusion of Gulf Arab states, in particular, Saudi Arabia, could catalyse a process that leads to the following:

1. A step towards formalizing Saudi-Israeli relations; 

2. Helping to improve Israeli-Palestinian relations; 

3. Fostering reconciliation between Fatah and Hamas; 

4. Unlocking Palestinian gas reserves and lessening the Palestinian Authority’s economic 5. dependence upon Israel; 

5. Addressing Jordan’s long-term energy security needs; 

6. Helping Saudi Arabia to meet its natural gas deficit; 

7. Promoting wider regional cooperation, by including Qatar and the UAE.

The inclusion of Gulf states in the EMGF also holds the potential of linking Red Sea and East Mediterranean security and thus connecting Gulf and Levant security.

How Saudi participation would work in practice

The process could begin with Saudi Arabia joining the EMGF. Despite not being an East Mediterranean state, Saudi Arabia’s plans to develop major projects along the Red Sea with Egypt, Jordan and eventually Israel means that it will share key interests with its East Mediterranean neighbours. Saudi Arabia requires imported natural gas. Although East Mediterranean gas will not satiate Saudi demand, given that gas flows will likely head towards Europe following Russia’s invasion of Ukraine, the East Mediterranean could nevertheless be a supplementary source of pipeline gas from Israel and Egypt via Jordan.     

Bringing Saudi Arabia on board will prove particularly challenging, but the regional environment is changing. It is a soft point of entry for growing commercial Saudi-Israeli ties and one that could open up opportunities for Riyadh to invest in Egypt’s LNG infrastructure – an ambition already mooted by Saudi Aramco.6 By doing so, Saudi Arabia would shore up Egypt’s economy, helping to offset growing economic discontent, and take a stake in the global LNG market – and export Israeli gas in the process. 

The inclusion of Saudi Arabia in a regional gas cooperation arrangement would not only bring Saudi Aramco (and Public Investment Fund (PIF)) into the East Mediterranean energy market – further complementing its move into downstream operations in central Europe – but it could also potentially provide Riyadh with leverage over Israel on the Palestinian file. Israel is eager to publicly formalize its relationship with Saudi Arabia; however, Riyadh will not do so until the Palestinian issue is ‘addressed’.7 That does not necessarily translate into resolving the issue or even implementing in full the Arab Peace Initiative, but it does entail making tangible progress towards increasing the Palestinian Authority’s political and economic independence, halting settlement expansion, and breathing life back into the two-state solution. 

Joining a regional forum such as the EMGF and sharing the platform with Israel would signal Saudi Arabia’s intent to move towards an accommodation, such as the Abraham Accords, as well as send a strong message to Tehran. In return, Saudi Arabia could ask for a firm commitment from Israel to fulfil the conditions noted above and facilitate the development of  the Palestinian economy. This would be a challenging ask given the formation in December 2022 of Israel’s most right-wing and religious government in the country’s history.8 But it would keep the Palestinian issue on the agenda among the Israeli public, which strongly supports Israeli normalization with regional neighbours. 

The Palestinian Authority dimension

One way of achieving greater Palestinian economic independence would be to encourage Israel and the Palestinian Authority (PA) to reopen the Gaza Marine files – closed for over a decade – with a view to exploring, developing and monetizing known gas reserves. Revisiting these assets and seeking investment to develop the resources could provide the PA with an independent source of income. Although the reserves are relatively small, estimates suggest that they could provide the PA with approximately $700 million to $800 million annually9 based on current gas prices.

Previously, discussions were closed down by both Israel and the PA over terms, and where the gas would be landed and how it would be monetized. Now that deals have been struck between Israel and Egypt, and Israel and Jordan, Palestinian gas could pass through either network – made material by Saudi Arabian or other Gulf Arab states’ investment. Revenues would be collected and managed transparently. Moreover, the UAE and Jordan could leverage their relations with Israel and the success of the Prosperity Green and Blue projects to encourage both Tel Aviv and Ramallah to compromise.

However, such a move would first require reconciliation between Fatah and Hamas. This is something that Saudi Arabia could call upon Qatar and the UAE to support now that the Gulf Cooperation Council (GCC) states have largely moved past their differences. Qatar would have no direct interest in joining the EMGF given that a) it already hosts the Gas Exporting Countries Forum in Doha; b) it considers East Mediterranean gas to be a (minor) competitor; and c) it would mean collaborating with Israel on energy issues. However, if the Saudi initiative were aimed at improving Gaza’s economic situation and empowering Palestinian leadership, then Saudi Arabia’s crown prince Mohammed bin Salman could likely enlist the support of Qatar’s emir Sheikh Tamim bin Hamad al-Thani in underpinning reconciliation. Relations between the two leaders were demonstrably warmer during the 2022 World Cup 10 and bode well for cooperation.

The Abraham Accords have narrowed the UAE margin for manoeuvre when it comes to the Palestinian issue. The UAE leadership argues that it, in fact, has greater leverage than before because of the strength of its bilateral ties with Israel; yet, it has not been able to influence Tel Aviv when it comes to settlement expansion activity. It does, however, wish to influence the Palestinian leadership process when Abu Mazen steps down as president of the PA. To that end, a Saudi-led initiative to help the PA develop Gaza Marine assets would provide the UAE with an avenue to influence Fatah–Hamas talks and the means to demonstrate to its detractors that it remains committed to the Palestinian cause, despite its new relationship with Israel.  

Other factors determining progress  

The East Mediterranean sea holds significant natural gas reserves, though these are small in comparison to other major basins or fields. For example, Qatar’s North Field is estimated to hold 24.7 trillion m3 compared to Israel’s 600 billion m3. 11 Nevertheless, the discovery of East Mediterranean reserves in 2009 and the rapid development of Israeli gas (20 billion m3 per annum12) and Egyptian gas (reaching 67.8 billion m3 per annum12) have transformed regional dynamics. In the space of a decade, Egypt has gone from declining production and mothballing LNG capacity to once again exporting natural gas – only this time around, also exporting Israeli gas through its network to make the proposition commercially viable. 

a Kambas, M. (2013), ‘UPDATE 2-Noble's Cyprus gas drill at lower end of estimates’, Reuters, 3 October 2013, https://www.reuters.com/article/cyprus-gas-idUSL6N0HT29F20131003 

b BP (2021), Statistical Review of World Energy 2021 

c This estimate is claimed by Lebanon's government, located in its offshore territory, but according to EIA, ‘until more exploration occurs, that figure remains speculative’; U.S. Energy Information Administration (2014), ‘Lebanon overview. Analysis – Energy Sector Highlights’, March 2014, https://www.eia.gov/international/overview/country/LBN 

d Al-Mughrabi, N. and Hassan, A. M. (2022), ‘Egypt is set to take part in developing Gaza's offshore gas field -officials’, Reuters, 12 October 2022, https://www.reuters.com/business/energy/egypt-is-set-take-part-developing-gazas-offshore-gas-field-officials-2022-10-12/ 

These game-changing gas discoveries gave rise to energy diplomacy and have helped to positively shift the nature of Israel–Egypt and Israel–Jordan relations. Whereas Israel was once an importer of Egyptian gas, it now exports through Egypt. Jordan’s dependency on Egyptian gas was exposed during the Arab uprisings. It was forced to buy LNG, which was at least three times the price of Egyptian pipeline gas. Its turn towards Israel – however unpalatable for the population – was born out of economic necessity. 

Although cold peace exists at the popular level, energy relations have tied together aspects of Egypt’s, Israel’s and Jordan’s economies and have given rise to greater economic integration. These advances serve as an example of how energy diplomacy can help states to identify common interests and work meaningfully towards them, leading to win-win solutions. Nevertheless, the downside of such cooperation is that it embeds discontent among populations and foments distrust of leadership. Consequently, regional spoilers are able to exploit diminishing levels of trust and public confidence in national leaders to use to their own advantage. Therefore, energy diplomacy, while an effective tool, must ensure that the benefits of cooperation are felt widely throughout society.    

Given the current political climate and sustained underinvestment in oil and gas supply,14 Europe needs new sources of gas if it is to reduce its dependency upon Russian gas supplies; that should therefore encourage East Mediterranean states to work together to increase production and secure market share. In fact, in June 2022, Israel, Egypt and the EU signed a deal to export Israeli gas through Egypt’s LNG network to Europe.15 But a significant increase in gas exports from Israel via Egypt will require major, long-term infrastructure investments and this is where the Gulf states – led by Saudi Arabia – could come in. 

The substantial windfall from oil and gas revenue as a result of the crisis in Ukraine16 presents an exceptional opportunity for Saudi Arabia and the UAE to invest in Egypt’s energy assets (as well as in Jordan and the Palestinian Territories), especially at a time when poorer regional states face the challenge of high inflation, increasing interest rates, growing food insecurity and rising levels of popular discontent. However, Saudi Arabia is unlikely to take the leap of faith unless it is persuaded to do so by a firm diplomatic push from the US. Given where US-Saudi relations are at present, it is difficult to imagine the crown prince Mohammed bin Salman entertaining US energy diplomacy overtures. That said, very few believed that the US could help to navigate the thorny pathways of Jordan–Israel, Egypt–Israel and Lebanon–Israel energy relations, so one should not discount the administration’s ability to work behind the scenes and produce a positive result.     

This article is part of a series for the ‘Building a Cooperative Regional Security Architecture in the Middle East’ project, a partnership between Chatham House’s MENA Programme and the Burkle Center for International Relations at the University of California, Los Angeles.


[1] Times of Israel (2016), ‘Israel consortium signs “historic” 15-year, $10b gas deal with Jordan’, 26 September 2016, https://www.timesofisrael.com/israel-consortium-signs-15-year-10b-gas-deal-with-jordan/ 

[2] Reuters (2020), ‘UDATE [sic] 1-Egypt could resell Israeli gas to Europe within months- Israeli minister’, 15 January 2020, https://www.reuters.com/article/israel-egypt-natgas-exports-idUSL8N29K57Z 

[3] Israeli Ministry of Energy (2022), ‘Jordan, Israel, and the UAE sign MoU to advance Project Prosperity, targeting COP 28 for implementation plan development’, Ministry of Energy Press Release, 8 November 2022, https://www.gov.il/en/departments/news/press_081122 

[4] Gebeily, M. and Lubell, M. (2022), ‘Israel, Lebanon finalise maritime demarcation deal without mutual recognition’, Reuters, 27 October 2022, https://www.reuters.com/world/middle-east/lebanon-israel-set-approve-maritime-border-deal-2022-10-27/ 

[5] East Mediterranean Gas Forum (n.d.), Homepage, https://emgf.org/ 

[6] Closed door meeting, Riyadh, December 2022.

[7] Magid, J. (2022), ‘Saudi minister: Peace with Israel “strategic option” but not before 2-state solution’, Times of Israel, 16 July 2022, https://www.timesofisrael.com/saudi-official-peace-with-israel-strategic-option-but-not-before-2-state-solution/

[8] Rubin, S. (2022), ‘Far-right Israeli government sworn in amid surge of resistance’, Washington Post, 29 December 2022, https://www.washingtonpost.com/world/2022/12/29/israel-government-netanyahu-religious-zionism/

[9] Najib, M. (2022), ‘Gaza offshore gas project: Agreement expected by year-end’, Arab News, 18 October 2022, https://www.arabnews.com/node/2182901/amp

[10] Nereim, V. (2022), ‘Qatar’s World Cup Showcases Renewed Ties With Saudi Arabia, but Scars Remain’, The New York Times, 30 November 2022, https://www.nytimes.com/2022/11/30/world/middleeast/qatar-saudi-world-cup.html 

[11] BP (2021), bp Statistical Review of World Energy 2021, 70th edition, London: BP 

[12] Rabinovitch, A. (2022), ‘Israel ramping up gas output, looks to help supply Europe’, Reuters, 17 May 2022, https://www.reuters.com/business/energy/israel-ramping-up-gas-output-looks-help-supply-europe-2022-05-16/ 

[13] BP (2022), bp Statistical Review of World Energy 2022, 71st edition, London: BP 

[14] Hares, W. and Yilmaz, S. (2022), ‘Underinvestment risks global energy security at ADIPEC’, Bloomberg Intelligence, 29 November 2022, https://www.bloomberg.com/professional/blog/underinvestment-risks-global-energy-security-at-adipec/ 

[15] El Safty, S. and Rabinovitch, A. (2022), ‘EU, Israel and Egypt sign deal to boost East Med gas exports to Europe’, Reuters, 15 June 2022, https://www.reuters.com/business/energy/eu-israel-egypt-sign-deal-boost-east-med-gas-exports-europe-2022-06-15/

[16] Di Paola, A. and Tobben, S. (2022), ‘Saudi Arabia Hikes Oil Prices as Crude Surges on Ukraine War’, Bloomberg, 4 March 2022, https://www.bloomberg.com/news/articles/2022-03-04/saudi-arabia-raises-oil-prices-as-commodities-surge-on-ukraine