The Israel-Hamas War Could Sink Gas Development in the Eastern Med

The Israel-Hamas War Could Sink Gas Development in the Eastern Med
Israeli Prime Minister Benjamin Netanyahu, Greek Prime Minister Kyriakos Mitsotakis and then-Cypriot President Nicos Anastasiadis arrive at the signing ceremony for the EastMed undersea gas pipeline, in Athens, Greece, Jan. 2, 2020 (AP photo by Yorgos Karahalis).

In addition to the human cost of the war in Gaza between Israel and Hamas, the conflict also poses clear challenges to the regional energy ecosystem that has emerged in the Eastern Mediterranean over the past decade. In that time, the waters of the Eastern Mediterranean have been a hotbed of offshore gas development. Major Western firms have begun extracting and exporting natural gas from fields discovered off Israel and Egypt. Gas was discovered in Cyprus’ exclusive economic zone, though it has not yet been exploited. And Lebanon has begun gas exploration on its recently agreed maritime border with Israel, though so far those efforts have been unsuccessful.

Meanwhile, revenues from gas have driven economic development in the countries that have begun to exploit their reserves. Development of these fields has also contributed to wider subregional cooperation, especially between Egypt, Israel, Cyprus and Greece. While liquefied natural gas, or LNG, from the Eastern Mediterranean is not yet a very significant part of the European energy mix, it is one of the few sources expected to increase in coming years: In June 2022, Egypt and Israel signed a memo of understanding with the European Union to boost gas exports.

Hamas’ attack on Israel and the consequent war in Gaza have already disrupted this energy ecosystem and could have a long-term impact on its future development and expansion.

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