Israel and Egypt's energy deal is important but unresolved issues remain

An oil platform in Israel's offshore Leviathan gas field on September 1, 2021. Energy deals shorn of underlying political and territorial disputes would boost co-operation. AP

In an ideal world, reports that Israel has approved an energy deal that will supply up to $35 billion of natural gas to Egypt would be promising. For two countries that went to war four times between 1948 and 1973, to embark on a major economic agreement would be a hopeful example of co-operation in a troubled region.

Indeed, in difference circumstances, such an agreement could be said to mirror the transformation seen in Europe from 1951 onwards. There, a continent once racked by mass warfare created an infrastructure interdependence that led to the creation of an alliance of more than two dozen nations that now trade and live together under the umbrella of the EU.

The difference with the Levant and the wider Eastern Mediterranean is that the continued occupation of Palestine does not allow the prosperity of the region to come to fruition.

An Israeli military ship next to an oil platform in the Leviathan gasfield in the Mediterranean Sea. Reuters

The Eastern Mediterranean remains riven by different interests and rivalries. Israel’s continuing occupation of Palestinian land, leading to injustice and the rise of various armed groups, continues to damage regional relationships and impedes efforts to build stability and prosperity. The two-year war on Gaza has strained relationships between Cairo and Tel Aviv in particular, especially as Egypt has called time and again for the unfettered delivery of humanitarian aid.

Undoubtedly, this is a significant deal and it is important that Egypt and Israel – which have had a peace treaty since 1979 – are able to work together. Egypt in particular, which is in need of energy sources, now has an agreement that will ensure its households and businesses have access to natural gas supplies. Overall, there is plenty to be gained from deeper energy co-operation in the region and the building of long-lasting ties between nations. As with the EU, economic and energy links build trust and partnerships. However, in the absence of genuine political and territorial consensus, bilateral energy deals may increase the strategic value of contested waters and sharpen maritime boundary disputes.

Even developments that ostensibly bode well for regional stability, such as the 2022 maritime border agreement between Lebanon and Israel, can fall flat without deeper political progress and a commitment to peace. The US-mediated deal once held out the prospect of increased natural-resource revenue for Beirut and Tel Aviv, but it has not prevented Israel from bombing and occupying Lebanese territory.

Undoubtedly, it is important that Egypt and Israel – which have had a peace treaty since 1979 – are able to work together

In short, resource development alone won’t bring about peace for the region. However, there is a way to build a situation where countries can come to mutually beneficial agreements. As Arab states made clear as far back as 2002, if Israel withdraws from occupied Palestinian land, recognition and relationships from the wider Arab world will follow.

Such a future is entirely possible, and there is much for Israel to gain too should it turn away from its current ruinous strategy regarding the Palestinians. Ending the occupation and quelling armed groups in the region is not a magic wand with which to solve all competing claims in the Eastern Mediterranean, but it would be a good place to start.