In October 2022, Israel and Lebanon sent separate commitments on a common maritime border to the United States. The deal was structured in this fashion, rather than as a bilateral agreement, to accommodate the government of Lebanon, which refused to sign anything directly with Israel.
The maritime border deal was intended to allow each country to develop one of two Mediterranean Sea gas fields (Israel calls them Karish and Qana), on the theory that Lebanon would moderate its views towards Israel because of new economic opportunities. This glimmer of hope received a rude awakening one year later. Hizbullah began firing thousands of rockets, missiles and drones from Lebanon into Israel, leading to a full-scale war when Israel launched a ground offensive on October 1, 2024.
On September 29, 2024, Israel’s Minister of Energy, Eli Cohen, called for the 2022 maritime border demarcation deal to be dissolved, calling it a “mistake.” Israel’s likely formal cancellation of this deal is a signal to Israel’s allies and adversaries alike of the tools the country is willing to deploy to cripple Hizbullah, which has effective control of the Lebanese government.
What does Lebanon Lose?
Under the 2022 deal, Lebanon gained control of the Qana gas field. While its precise amount of natural gas remains undetermined, initial drilling and exploration efforts suggest that the gas field might yield profits ranging from 100 to 200 million US dollars per year for Lebanon.
With the imminent dissolution of the deal pending, Israel is likely to assume control over the formerly disrupted gas fields. Given current resourcing priorities and constraints in wartime, Israel is unlikely to accelerate or expand drilling plans. This move signals Israel’s willingness to use whatever economic levers are available to cut off Hizbullah, and thereby the Lebanese state, from all potential streams of revenue.
What could Israel Gain?
If it seizes the Qana gas field, Israel could gain access to a new source of natural gas. However, seizure would likely not lead to any immediate economic gains and would likely be contested by a number of international energy conglomerates operating and drilling in the Eastern Mediterranean. Nevertheless, Israel is more capable than Lebanon of deploying resources to develop the infrastructure necessary to drill and operate pipelines across the contested gas fields. Thus, Israel may not need to rely on international partners to take next steps towards drilling, thereby lessening overall consequences.
Who Else is Affected?
Total Energies, a French energy consortium, holds a licensing agreement with Lebanon for drilling in Lebanon’s gas fields gained in the deal. Some speculate that Israeli officials are willing to jeopardize the deal as a means of retaliation towards France, in the wake of Macron’s support for increased aid to Lebanon and calls for a ceasefire.
International investors, particularly European firms, may refrain from investments along Lebanon and Israel’s coasts. Netanyahu has threatened a ground offensive to attack the southern shores of Lebanon, which could destroy infrastructure in place to support future energy processing and exports.
Beyond signaling to investors and allies, Israel’s actions tell adversaries that after a year plus of deploying its men and women to fight Iran’s proxies, the country is willing to use economic as well as military tools, even if it means canceling US-backed deals. A move to formally cancel the maritime border deal with Lebanon would be a sign of escalating the war into a new realm.
