How Israel-Europe Gas Deal Will Transform European Geopolitics

The status of Russia’s conflict against Ukraine, which is difficult to predict, may have a significant impact on an unexpected front – a Israel-Europe gas deal which will transform European geopolitics and energy security.

How Israel-Europe Gas Deal Will Transform European Geopolitics

This week, Israel formally established itself as being a natural supplier to Europe, one of the world’s greatest markets.

The disclosure of an agreement inked by Israel, Egypt, and the European Union on June 15 at the East Mediterranean Gas Forum will be a significant deal for both Europe and Israel. The Europeans’ quest for alternate natural gas sources is a direct effect of Russia’s military operation in Ukraine.

A Big Deal for Europe and Israel

Europe has been reliant on Russian natural gas and Russia’s favors for energy for decades. As a means of influencing policy, Moscow has repeatedly cut off gas supplies to European nations at will.

Gaining new accessibility to Israeli natural gas enables it to shift away from Russia as its major energy supplier, notably for natural gas.

It is also a significant step forward for Israel, which is using the Leviathan natural gas reserves off its coast in the Eastern Mediterranean as a gateway to becoming a worldwide energy provider. The transportation strategy is straightforward, and it will permit gas exports to commence earlier than many anticipated.

A Change in Plans

The original long-term goal had been to construct a pipeline from the Eastern Mediterranean gas fields to Cyprus, then on to Greece, and finally into Western Europe. Turkey, which asserts ownership of natural gas, has contested those proposals. Additionally, it has asserted territorial rights over any pipeline that passes through Cyprus or the sea boundary that Turkey and Libya claim separates the two nations.

However, the current deal states that no additional pipelines will have to be built, at least not immediately. Instead, it is intended to utilize current pipelines that connect Egypt’s liquified natural gas plants to Israel and Jordan. Within a few years, the liquefied natural gas (LNG) will be carried from there directly to European markets via existing shipping lanes to European port(s).

Israel’s Gain Is Russia’s Loss

Israel will get enormous revenue inflows from its European consumers at Russia’s expense as LNG supplies to Europe pick up during the upcoming years. At the moment, 40% of Europe’s natural gas imports come from Russia. That amounted to $119 billion in yearly income going from Europe to Russia in 2021. As energy prices keep rising, revenue flows will be much higher. Being the single largest component of trade between Russia and Europe and accounting for 36% of the nation’s total budget, natural gas is nothing less than a strategic asset.

How Israel-Europe Gas Deal Will Transform European Geopolitics 2
The corporate 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 agreement benefits Israel in many ways than simply financially. It exemplifies how effectively Israel and its Arab ally, Egypt, can cooperate for their shared economic gain.

The Arab and Islamic worlds will see and hear this message of cooperation and mutual benefit loud and clear. The idea that other Arab countries that could gain from improved relations with Israel will cooperate in the same way as Egypt is not just wild speculation.

The power dynamics between Russia and Europe will also be radically changed once liquefied natural gas exports start to reach Europe.

Bad News for Russia

That is great news for Europe and Israel, but it is awful news for Vladimir Putin and Russia. Economically, the consequences of Europe abandoning Russia as a supplier of both oil and natural gas will be disastrous for the Russian economy.

Russia might need to locate new market soon.

It is important to note that China already purchases Russian energy, giving Russia profits that compete with the European market, even at reduced rates. However, this situation might not persist indefinitely.

But from a geopolitical standpoint, the Israeli-European gas deal is also quite troublesome for Russia. Without the ability to convince or punish Europe by threatening to stop supplying natural gas, Russia will have very few other tools at its disposal to impact European policy.

Moscow knows this as well as anyone, which raises the new agreement’s degree of complexity, if not risk.

How Will Moscow React?

How, for instance, might Moscow respond to this development?

It may be regarded as a threat to Russia, if not an economic act of war, as was mentioned. The overall impact might be similar, even though there is no actual lack of food or energy.

Moscow can take the new natural gas arrangement in the light of the fact that the EU and Israel—two vocal opponents of the incursion of Ukraine—are collaborating, if not planning, to deny Russia access to its most significant market.

That is accurate. And it is possible that it may put Russians through severe economic hardship. Additionally, Russia’s geopolitical influence in the rest of the globe and in Europe would decline.

Would Moscow adopt a wait-and-see stance toward Israel and the European Union in the hopes of persuading one of them to back out of the deal?

Or would it use a naval blockade to stop the flow of natural gas into Europe to safeguard its economic interests?

The status of Russia’s conflict against Ukraine, which is difficult to predict, may have a significant impact. However, if Europe is free of Russian gas, it will no longer be a target of Russian extortion, albeit it still runs the risk of being militarily intimidated by Moscow.

Israel is fully aware of Russia’s military position along its northern border, thus the same logic also holds true for it. Russia may start another war as a result of this agreement.

And besides, what other hand does Russia have?

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