international analysis and commentary

Oil and gas in the Eastern Mediterranean: new horizons for regional conflict

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In the Middle East, the world’s attention has been captivated by the threat of a rising nuclear Iran and a tumultuous Arab Spring with all its geopolitical repercussions – most notably the rise of political Islam. However, a new and emerging conflict is rapidly developing over the vast natural gas reserves in the Levant basin which could transform Israel and Lebanon into major world energy producers and change the geopolitical landscape of the region.

Two questions directly come to mind, the first has to do with why this issue has kept such a low profile in media headlines over the past few years. The second is about how serious the prospects are of a major geopolitical change in the region and how would they possibly materialize.

Before answering these questions it would be beneficial to first give some background information on the facts regarding the discovered natural gas reserves.

According to a study by the United States Geological Survey, a US organization that provides scientific information on the distribution of natural resources, the triangular area between Lebanon, Cyprus and Israel is estimated to hold as much as 1.7 billion barrels of recoverable oil and an average of 3.45 trillion cubic meters of recoverable natural gas. Now what does this mean according to global standards? While these oil reserves may not prove to be very significant at a global level, the potential amount of natural gas in the Levant basin would place the region at number 13 in the global ranking of producers, ahead of  countries such as China, India and the United Arab Emirates.

International rankings aside, one thing is clear: there is enough oil and gas in the Levant basin to stir international concern especially in an area as politically fragile as the Middle East. Then why hasn’t this issue surfaced yet as a major area of political and economic rivalry?

The main reason is that the involved counterparts have been keen not to internationalize the issue at this stage. Moreover, US foreign policy has actively chosen to discount this issue at the moment due to its much more impending focus on the intensifying conflict over energy reserves in the South China Sea. The government of the Philippines, with strong backing from US officials and the European community, has recently filed a case against China before a UN tribunal disputing very large maritime areas that are believed to hold sizable energy reserves. This marks a large milestone in an ongoing regional struggle over natural resources in the Southeast Asia region and delineates Washington’s general trend in shifting its foreign policy focus more towards East Asia.

The Obama administration has been supportive of a multilateral approach to solve disputed maritime borders with China in East and Southeast Asia, something that may prove to be disadvantageous for Israel were it to invoke US support. In parallel, the international community in general has been avoiding this issue possibly due to the colossal regional repercussions that could ensue, further adding to the complex challenges facing the region.

Turning to the second question regarding the destabilizing potential of the Levant basin oil and gas reserves, it becomes evident that it is only a matter of time until the international community and the United States will be dragged into this issue. Sayyed Hasan Nasrallah, the Secretary General of Hezbollah, has issued clear threats against Israeli oil and gas installations in disputed coastal areas south of Lebanon. Nasrallah has continuously warned Israel against any attempt to plunder Lebanon’s offshore oil and gas reserves as the struggle to demarcate maritime borders between the two countries worsens.

Israel has clearly outpaced Lebanon in tapping into its natural resources with gas production projected to start as early as April 2013. Lebanon lags behind and has just recently passed a law in parliament that permits offshore oil and gas exploration. The first licensing round for offshore exploration is expected to be finalized sometime this year.

Although the disputed maritime territories between the two countries are only a small fragment of their respective exclusive economic zones, the complicated history of political conflict between the two could prove to be a major obstacle to the extraction of natural resources in the Levant basin as a whole.

Such reserves have the potential to transform the domestic politics in each country individually and redefine each country’s role in the regional balance of power. Judging from the history of political struggle in the Levant, these transformations will likely spill over into the general regional political struggle that encompasses Iran, Syria and the ongoing developments of the Arab Spring.

That said, it is only a matter of time before disputes over oil and gas in the Levant basin intensify. Judging from the complex political environment in the region it is unlikely that oil and gas production will materialize without a clear political agreement between Lebanon and Israel in cooperation with regional counterparts and the international community. With the ongoing events in Syria, and the longstanding conflict between Hezbollah, Iran and Israel, such a bargain may prove to be difficult at the moment. Nevertheless, in the short to medium term oil and gas exploration and excavation will carry on and intensify in non-disputed maritime territories. The race for energy in the Levant basin has begun.