No region stands to gain more from the upcoming energy crisis in Europe than Asia’s newer partnerships and groupings. As winter is approaching and the end of the Ukraine war nowhere in sight, European countries are scrambling to diversify their energy sources. Perhaps a region that lies in Europe’s short sight might just gain more importance in global energy security than it was given credit for only half a decade ago.
What could possibly be the repercussions of this new and emerging partnership in the geo-economic world order and how is this affecting the optics in West Asia is worth further analysis. Recently, Israel and Lebanon signed a maritime deal ending their decades-long dispute. The deal outlines the maritime boundary line of the two countries in the Eastern Mediterranean region which also opens the door to joint exploration, lawful sharing of resources and more importantly, for the West, a potential alternative for energy in the long term.
At a political level, the agreement is significant as it is between two countries which have been formally at war since 1948 and have no diplomatic relations. Israel construed the agreement as a diplomatic win and formal recognition of the State of Israel. Washington, which brokered the deal, dubs the agreement as “one step closer” to the integration of the Middle East. Lebanon becomes only fourth in the region after Saudi Arabia, Jordan, and UAE to engage with Israel regardless of historical hostilities, pending de jure recognition. And despite Lebanon’s contention that the deal has no political implication, clearly the optics is holding fast with the US being the peace-maker and diplomat in wooing the Arab nations to the Western camp. Besides, the US’ given status as a negotiator and peace maker in the region is only getting more solidified and legitimised adding to its diplomatic credentials.
Israel and the Iran-backed Hezbollah have locked horns about energy exploration in the disputed region in the past. However, the deal is testimony to the fact that in realpolitik, co-existence and, sometimes, compromise become prerequisites for shared prosperity perhaps at the expense of ideology. For Lebanon which has been grasping at straws, the deal is an opportunity to escape the spiralling economic crisis by attracting foreign investment. Concurrently, the maritime dispute deal brokered by the US and supported by France at this time in history owes as much to geo-economics as well. The Ukraine war and Western sanctions on Russia have left an unavoidable vacuum in the global energy sector. The maritime deal in effect would increase the likelihood of turning Eastern Mediterranean into an alternative energy hub for Europe.
This could just be the beginning of a new energy world order, having grave implications on Russia’s stature as the energy provider for Europe and thus depleting its leverage in the war and geopolitics at large. According to the International Energy Agency (IEA), Russia’s oil exports and the revenue from it is at a year-long low, reduced by about 560,000 barrels per day as compared to before the Ukraine invasion. The exports to EU also decreased by 390,000 barrels per day in September as compared to that in August slicing off $3.2 billion from its export revenues. Now, with the EU embargo on Russian crude and maritime services coming to full effect in less than two months and in turn the Russian threats to cut oil supply would only accelerate the diversification plans of Europe. The Mediterranean region, rich in natural gas and hydrocarbons (mean probable reserve of 1.7 billion barrels of oil resources and 122 trillion cubic feet of natural gas), has the potential to take over the energy supply chain to Europe with a receding Russia crippled by Western sanctions. Moreover, Europe is looking towards the eastern Mediterranean particularly the Levant basin (including Israel, lebanon, Cyprus, Jordan, Syria and Palestine) owing to the feasibility of shorter pipelines and saving transportation routes.
Since the invasion, Europe has not only attempted to bring down demand and save energy, but also hike imports of natural gas from traditional suppliers like Algeria, Norway and the US. Sub-Saharan countries like Mozambique and Senegal and Eastern European countries like Azerbaijan are also being considered as alternative sources by many European countries, filling up Europe’s gas storage capacity by almost 90% and the reliance on Russian gas fell considerably from 41% in January 2022 to 7.5% now. Although this winter may look secure for European countries, long term security and affordability of the energy supply chain is crucial for political and fiscal stability for the weakest economies of the lot. Moreover, a stable and economically better off Lebanon would be one step closer to achieving stable geopolitical and geo-economic futures in the region and globally.
Sharon Susan Koshy is a Research Associate at Centre for Public Policy Research, Kochi.