Israeli gas and the crafting of a 'new Middle East'

In Lebanon, Washington could use the project as a lever to roll back Hezbollah's arms and reshape Lebanon's internal balance of power after the setbacks suffered by Hezbollah and Iran.

Within this Levantine tableau, Israel's announcement of a new agreement to supply natural gas to Egypt, valued at nearly $35bn, adds an additional layer of intrigue to the emerging picture. The deal, described as the largest in Israel's history, goes well beyond its economic significance. It signals the rise of Israeli gas as a recognised pillar of the emerging regional energy order. The expansion of the 2019 agreement and the increase in export volumes, enabled by production from the Leviathan field, effectively position Egypt as a gateway for channelling Israeli gas to Europe at a time when Western states are seeking alternatives to Russian oil and gas.

Political and logistical cover

This development unfolds amid intensifying competition over Eastern Mediterranean gas and the delineation of maritime boundaries involving Türkiye, Greece, Cyprus, Syria, Lebanon, and Libya. It has strengthened Cairo's standing as an energy hub while also providing political and logistical cover for the revival of the Arab Pipeline.

It is significant that Chevron, the American operator of the Leviathan field, is at the centre of this configuration and has shown growing interest in investing in Syria following its meeting with al-Sharaa. Damascus, for its part, is exploring options to ease its energy crisis by importing gas from Azerbaijan or Qatar under Turkish auspices, pending resolution of its own production constraints.

To understand the present moment, it helps to look back. In 2021, Amos Hochstein, one of the State Department's senior energy envoys, informed Beirut that the Arab Gas Pipeline was exempt from the Syria-related sanctions imposed under the Caesar Act. Yet the US Treasury declined to issue the authorisations required to proceed. What has brought the project back today is the repeal of the Caesar Act, following a congressional vote and Trump's approval.

Decade-old roots

The roots of the project—and of the regional architecture surrounding it—extend further back. In 2014, Jordan and Israel signed an agreement intended to consolidate what was described as an axis of moderation in the Middle East, linking a number of Arab states with Israel. Hochstein had already overseen talks between Tel Aviv and Amman in 2012, which culminated in an agreement between the Jordanian Electric Power Company and the consortium operating the Leviathan field, represented by a US firm, to supply gas for electricity generation.

Further agreements between Egyptian and Israeli companies followed, leading in early 2018 to a bilateral gas deal. Cairo later stated that importing gas from Israel would bolster Egypt's ambition to become a regional energy hub and a key player in the Eastern Mediterranean gas sector. This, it argued, would enable re export to Europe and support the establishment of the Eastern Mediterranean Gas Forum in early 2019.

Today, the repeal of the Caesar Act, the revival of Israeli gas exports, the renewed focus on the Arab Pipeline, and the Syrian-Jordanian-Lebanese electricity linkage do not constitute a technical breakthrough. They point instead to a strategic shift in which Washington seeks to integrate the region's energy, geography, and water resources to reshape the Middle East.

Syria returns to the map as a corridor for transit and competition. Lebanon is steered toward an economic and negotiating track designed to constrain Hezbollah's influence. Egypt is recognised as a regional energy centre, while Jordan serves as a conduit for gas and electricity.

Gas becomes a language of politics, trading energy for stability and economic opportunity for influence, at a moment when Washington is recalibrating its priorities and instruments across the region.