When it discovered the Tamar and Leviathan gas fields offshore in the Mediterranean's Levant Basin, Israel gained lots of regional diplomatic leverage overnight. Soon, it would (and did) have gas, both for domestic use and export, giving it a status it had never known before. Tel Aviv has used that gas to build powerful relations in the region, and relations have been on a path toward normalization ever since.
In 2022, Israel signed a gas deal with Egypt for natural gas exports to Europe. Israel is currently in talks with Greece and Cyprus about a Cyprus-based terminal to liquefy Israeli gas for export to Europe. The Israelis have also considered a pipeline to Turkey and building their own liquefaction plant. If relations with Turkey were strained before, they will be so much more so now. The world can assume that the Greece-Cyprus deal is now the only option.
The Tamar field produces up to 8.5 million cubic meters per day. It was shut down when Hamas attacked Israel on October 7. If it goes on much longer, Israel could end up declaring force majeure. It's a big hit for Chevron, which had in December made an FDI to increase Tamar's production in two phases, up to 1.6 Bcf/d in 2025.
Leviathan (a field twice as big as Tamar) produces up to 300 million cubic meters per day. Both send exports to Egypt. The shutdown of Tamar will also affect Egypt's LNG exports, which were already lagging. And Leviathan could end up making up for the shortfall, though Israel needs…
When it discovered the Tamar and Leviathan gas fields offshore in the Mediterranean's Levant Basin, Israel gained lots of regional diplomatic leverage overnight. Soon, it would (and did) have gas, both for domestic use and export, giving it a status it had never known before. Tel Aviv has used that gas to build powerful relations in the region, and relations have been on a path toward normalization ever since.
In 2022, Israel signed a gas deal with Egypt for natural gas exports to Europe. Israel is currently in talks with Greece and Cyprus about a Cyprus-based terminal to liquefy Israeli gas for export to Europe. The Israelis have also considered a pipeline to Turkey and building their own liquefaction plant. If relations with Turkey were strained before, they will be so much more so now. The world can assume that the Greece-Cyprus deal is now the only option.
The Tamar field produces up to 8.5 million cubic meters per day. It was shut down when Hamas attacked Israel on October 7. If it goes on much longer, Israel could end up declaring force majeure. It's a big hit for Chevron, which had in December made an FDI to increase Tamar's production in two phases, up to 1.6 Bcf/d in 2025.
Leviathan (a field twice as big as Tamar) produces up to 300 million cubic meters per day. Both send exports to Egypt. The shutdown of Tamar will also affect Egypt's LNG exports, which were already lagging. And Leviathan could end up making up for the shortfall, though Israel needs the gas for domestic use.
The Karish field is also at risk, due to its proximity to Lebanon. Energean started production at Karish just a year ago to the tune of as much as 6.5 Bcm/year of gas, with more on the way-as long as Hezbollah doesn't turn the screws here, as it has threatened to do. Hezbollah claims its missiles can reach Karish.
In Q3 2021, after normalizing relations with the UAE the year before, Israel signed a $1B gas trade deal with the UAE for 22% of Tamar's production.
Israel has been selling its gas to Jordanian industrial facilities, which is a major feat for on-again-off-again enemies with extremely fragile diplomatic ties. Just a few weeks ago, before the Hamas attack, Israel and a UEA energy executive met to advance a water-for-energy deal with Jordan. (solar energy from Jordan via a UAE-funded plant for Israel, and desalinated water for Jordan).
This spring, the Gulf entwined itself even tighter with Israel when the UEA's ADNOC and BP made a $2B bid to purchase 50% of NewMed Energy, the Israeli offshore producer with a 45% in the giant Leviathan field.
Over the past decade, Israel has seen production grow 700%, but now this new-found energy status is under threat. It could become a casualty of a lack of Israeli foresight that has now led to a conflict in Gaza that could easily become a multi-front battle drawing in (at the least) Iran and the factions, such as Hezbollah, that it backs.
The October 7 Hamas attack did not come out of the blue. Tensions between Israelis and Palestinians had been on the rise, guided by an aggressively nationalist Israeli PM, Netanyahu.
For now, Iran's call for an oil embargo on Israel due to its iron-fisted actions in Gaza is not likely to be heeded by OPEC, but Tamar is already shut down; Egypt will take a hit on exports; oil cargoes are being diverted away from the main Mediterranean port because it's too close to the Gaza Strip; shares in NewMed have been plunging; and everything Tel Aviv has worked for to become an energy diplomat in the Middle East is now highly uncertain.
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