Lebanon-Israel agreement: a new balance in the Mediterranean energy scene?
Geoeconomics

Lebanon-Israel agreement: a new balance in the Mediterranean energy scene?

By Martina Angelini
11.22.2022

After a decade-long dispute and two years of US-brokered negotiations, Israeli Prime Minister Yair Lapid and Lebanese President Michel Aoun signed the maritime border agreement, thus regulating their exploitation rights overt the Karish and Qana gas fields in the disputed area.

At first glance, this agreement might seem a turning point for Lebanon-Israel relations, since, to date, the two states do not recognize each other's territorial boundary, do not maintain diplomatic relations, and remain formally at war with each other. However, the real political impact of the agreement is rather limited. This is well indicated by the form taken by the agreement. It is in fact not a bilateral agreement between Lebanon and Israel, but rather two bilateral agreements signed separately by the two countries with the mediating country, namely the United States. In this way, Lebanon averts the possibility of (implicit) recognition of the State of Israel. The support for the agreement by Lebanon's most Israel-averse party, Hezbollah, confirms the essentially technical (rather than political) nature of the agreement. It is conceivable, however, that cooperation between the two states in the Qana field -on which Lebanon has full exploitation rights, with an obligation to pay royalties to Israel- could create the conditions for greater stability between the two countries, by acting as a deterrent to possible attacks by Hezbollah against Israel.

While normalization of relations remains a distant prospect, the energy implications of the agreement appear far more immediate and significant. On the Lebanese side, the prospect of increased energy capacity could lead to an improvement in the national energy situation, which to date has been rather fragile with frequent and intense power outages. Furthermore, proceeds from the field could alleviate the economic and financial crisis that has gripped Lebanon since 2019. Additionally, in the wake of successful negotiations, concrete prospects are opening up for Beirut to overcome the impasse with other countries over similar maritime delimitation agreements, so as to allow offshore energy exploration of other disputed areas in the eastern Mediterranean. Specifically, the disputes concern the northern maritime borders with Syria and western borders with Cyprus. In the aftermath of the signing of the agreement, Beirut expressed renewed interest in negotiations with both countries, and Nicosia has, in turn, already sent a delegation for talks to the Lebanese capital.

On the Israeli side, the exploitation of these gas fields strengthens export capabilities and consolidates the country's role as a Mediterranean gas power. In addition, the agreement could enhance energy cooperation with the European Union (EU), building on the June memorandum of understanding between Israel, Egypt and the EU. In the memorandum, the parties pledged to strengthen mutual energy cooperation by establishing a corridor for natural gas exports from Israel to Europe via Egypt, where the gas will be liquefied and eventually transported by sea.

Benjamin Netanyahu's overwhelming electoral success on the November 3 Knesset elections can affect the agreement's future, since during his election campaign the Likud leader had expressed his staunch opposition to signing the agreement, branding it as "a historic surrender" to Hezbollah and, ultimately, to Iran. However, while the fate of the agreement remains uncertain, the U.S. diplomatic success is incontrovertible: the United States strengthens its role as a security guarantor and solidifies a negotiating model that can be replicated in other similar disputes in the eastern Mediterranean, primarily between Cyprus and Turkey.