A Wider Israel-Hezbollah War Will Impact Gas Supplies in Israel, Egypt, and Jordan
It will also raise global LNG prices. (with 4 charts)
EOAs Main Takeaways
An Israeli invasion of Lebanon might lead to energy crisis in Israel, Egypt, and Jordan. The country that might suffer the most is Egypt. Such development will also affect the global LNG market as several shipments are shifted to Egypt and Jordan. Plans for new offshore licenses or expand current gas projects have already been delayed or at risks of being delayed. New investment is completely halted.
Source: Offshore technology, 2024
As tension continues to escalate between Lebanon’s Hezbollah and Israel, there are fears that the two sides may slide to a wider and more devastating conflict. After Israeli officials claimed that operational plans have been approved for an offensive in Lebanon, Hezbollah released a video earlier this month threatening to attack strategic Israeli locations, including offshore gas assets, such as the Karish gas field which is near Lebanon.
The possibility of an expanded war between Hezbollah and Israel raises concerns about how this will disrupt Israel's energy scene. Israeli gas flows are not only crucial for the domestic gas market, but also for neighboring Jordan and Egypt. These two countries rely heavily on gas supplies from Tamar and Leviathan – Israel’s two other offshore gas fields.
In this article, we provide an overview of:
Israel’s gas market in terms of production, exports, and consumption.
Potential repercussions on the Egyptian and Jordanian markets in case Israeli gas supplies are halted due to a wider war with Hezbollah.
The future of gas development and exploration activities offshore Israel and Lebanon amid a prolonged conflict in the East Mediterranean.