Abraham Accords 6 min read

Israel-Egypt Gas Deal Signals Evolving Regional Dynamics, Accords Potential

Abraham Accords: A framework for normalisation, but one facing complexities and geopolitical headwinds.

The Abraham Accords, brokered in 2020, represent a landmark shift in Middle Eastern diplomacy. Initiated under the Trump administration, they saw Israel normalise relations with the United Arab Emirates and Bahrain, followed by Sudan and Morocco. The core premise involved reciprocal diplomatic recognition, alongside cooperation in areas like trade, tourism, and security. Today, while official diplomatic ties remain in place, the initial momentum has slowed. The accords were predicated, in part, on a shared concern regarding Iranian regional influence. However, implementing substantial economic and security cooperation has proved challenging, and the benefits haven’t been evenly distributed across all signatory states. The changing geopolitical landscape, particularly the war in Ukraine and the ongoing conflict in Gaza, have further complicated the situation, presenting both opportunities and obstacles to deepening normalisation.

Progress Made: Energy Cooperation Leads the Way

The recent signing of a $35 billion agreement between Israel and Egypt for the export of Israeli natural gas signifies a tangible outcome of the evolving regional dynamic post-Abraham Accords, and potentially foreshadows further integration. This deal, building upon existing understandings, will see Israel’s Delek Drilling, NewMed Energy, and Egypt’s East Gas Company cooperate to significantly increase gas exports to Egypt over the next decade. Egypt, a major regional energy player with substantial LNG facilities, will liquefy the gas and re-export it to Europe, addressing growing European demand for alternative energy sources following the disruption of Russian supplies.

The agreement isn’t merely about energy security for Europe; it strengthens Egyptian revenues and positions the country as a key energy hub. For Israel, it unlocks the full commercial potential of its substantial offshore gas reserves – the Leviathan and Tamar fields. This is a major economic boost and validates years of investment in infrastructure. It’s also notable that Jordan, another country with normalised ties with Israel, is likely to benefit from increased access to energy resources through this arrangement.

Beyond the gas deal, economic ties continue to develop, albeit at a less rapid pace. Trade between Israel and the UAE and Bahrain has grown significantly, driven by sectors like tourism, technology and fintech. Joint ventures are emerging in areas like renewable energy, agriculture and water management. Cultural exchanges and people-to-people programs are progressing, fostering greater understanding, however, these remain modest in scope compared to ambitious initial forecasts.

Challenges: Political Shifts & Lingering distrust

Despite the encouraging developments in energy cooperation, significant challenges continue to impede broader progress towards full normalisation. The Palestinian issue remains a core point of contention. Many Arab states, while engaging with Israel, maintain that a lasting peace requires a resolution to the Israeli-Palestinian conflict. The recent escalation of violence in Gaza and the West Bank has highlighted this sensitivity, prompting criticism of the Accords’ prioritisation of economic ties over political solutions.

Political instability within signatory states also poses a risk. Leadership changes or shifting domestic priorities could lead to a recalibration of foreign policy, potentially jeopardising existing agreements. Morocco, for instance, has maintained a more cautious approach, linking further normalisation to progress on the Palestinian question. The economic benefits haven’t been evenly felt across the region either. Sudan’s internal conflicts, which erupted in April 2023, have effectively stalled any further progress in its normalisation process with Israel.

Moreover, deep-rooted societal distrust remains a formidable barrier. Years of conflict and animosity haven’t simply disappeared. Negative public perceptions, fuelled by media narratives and historical grievances, can limit the potential for meaningful people-to-people engagement and ultimately constrain the scope of normalisation. The lack of comprehensive security cooperation frameworks also limits the potential for meaningful collaboration on shared threats.

Israel-Iran Dimension: A Shared Strategic Concern

The Abraham Accords were undeniably influenced by shared concerns regarding Iran’s regional ambitions and nuclear program. The perceived threat from Tehran served as a key driver for closer security cooperation between Israel and some of its Arab partners. The gas deal between Israel and Egypt, while ostensibly about energy security, carries a strategic dimension in this context. It strengthens cooperation between two countries who view Iran as a rival.

Egypt is keen to enhance its energy independence, reducing its vulnerability to potential disruptions by Iran in the Persian Gulf. Israel, for its part, sees increased energy sales as bolstering its economic and strategic standing, increasing its leverage in regional dynamics. Tehran has consistently criticised the Accords, viewing them as a betrayal of the Palestinian cause and a further entrenchment of Israeli influence in the region.

The ongoing shadow conflict between Israel and Iran, involving cyberattacks, proxy wars, and alleged sabotage operations, adds another layer of complexity. Any escalation of this conflict could jeopardise the fragile progress made through the Accords, forcing regional actors to reassess their alignments. An Iranian nuclear capability would also amplify concerns, potentially prompting a deeper security alliance among countries aligned against Tehran, further cementing the framework offered by the Abraham Accords.

Path Forward: Incremental Steps & Pragmatism

Looking ahead, complete regional normalisation remains a distant prospect. The current geopolitical climate necessitates a more pragmatic approach, focusing on incremental steps and building upon existing cooperation. Expanding energy cooperation, like the Egyptian deal, represents a viable pathway for deepening ties, as it offers clear mutual benefits and is relatively insulated from the more contentious political issues.

Strengthening economic ties – promoting trade, investment, and joint ventures — will require addressing practical barriers, such as trade regulations and logistical challenges. Investment in infrastructure, particularly transport links, will be crucial to facilitate greater economic integration.

However, the situation in Gaza will continue to cast a long shadow. Finding a pathway to de-escalation and a sustained ceasefire is critical to restoring regional stability and mitigating the risks of further polarisation. While a comprehensive peace agreement between Israelis and Palestinians may not be immediately attainable, confidence-building measures and renewed diplomatic efforts are essential to prevent further deterioration.

Ultimately, the success of the Abraham Accords will depend on a sustained commitment from all parties, a willingness to navigate complex challenges, and a shared understanding that cooperation and mutual benefit are in everyone’s long-term interests.

Source: Analysis based on publicly available information and expert commentary relating to Israel-Egypt gas agreement and the broader context of the Abraham Accords. (Merlows.com editorial team).

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