The rare diplomatic breakthrough between Israel and Lebanon on the Maritime Border Agreement is a strategic and economic bargain between the two countries. Mediated by the United States of America at a UN base near the border, the agreement does not signal a move to normalize relations. It will, however, significantly reduce short term conflicts between the two warring countries.
Israel and Lebanon have contested the boundary agreement separating the exclusive economic zones for over a decade. The disputed waters contain the Karish and Qana prospect gas fields, lucrative gas deposits in the Eastern Mediterranean. In 2011, Israel and Lebanon submitted their respective EEZ demarcations to the UN. Israel asserted their maritime boundary north of Line 1, giving it the right to operate in Karish with access to other gas reserves. Lebanon marked their maritime boundary further south at Line 23. In 2012 a US mediator suggested a midway boundary line called the ‘Half line,’ but neither Israel nor Lebanon accepted the proposal. A decade later, Lebanon demanded that the maritime boundary be pushed further south to Line 29. What is significant is that the latest US mediated proposal accepted by the two parties on October 11 settles the maritime boundary at Line 23. The deal allows Israel to exploit the Karish gas reserve and access the revenues from the Qana prospect gas field. Lebanon did make a couple of last-minute demands on the definition of the demarcations and about potential revenue sharing from the gas reserve within their EEZ, but this is a major win for a country grappling with an unfathomable economic crisis.
Tel Aviv did make territorial concessions by accepting Line 23, as most of the disputed territory (860 sq km) now lies with Lebanon. However, the country secured the first five kilometres close to the shore to strengthen its maritime security. Israel, an energy exporter, will significantly add to its output by producing gas at its Karish field. Soon after the agreement, British energy giant Energean announced that it would ramp up gas production at the Karish gas reserve. Energy operators interested in accessing the Qana prospect will have first to secure a financial arrangement with Israel, in which Lebanon will have no say. The maritime region’s economic interests will deter either country’s vested political interests from reneging on the agreement. It is also important to note that Turkey and Greece, two major stakeholders in Cyprus, have welcomed the agreement. The Turkish Foreign Ministry publicly stated that the agreement sets a “good example” for the region.
With a country coming out of a catastrophic pandemic, infested with corruption and a failing financial system, the maritime agreement brings in just enough sunshine to keep Lebanon afloat. The agreement will secure better deals with the IMF, bring stability to the region, and attract more investments to redevelop Lebanon. The presence of a team from France’s TotalEnergies the day following the agreement and growing interests among potential energy investors is a positive development. International companies were unwilling to exploit the Qana reserve until the border dispute was resolved. Critics however argue that it will take several years before Lebanon starts to reap benefits because it is still unclear if it has proven gas reserves.
Hezbollah’s Hassan Nasrallah’s public support for the agreement is yet another significant political development in the region. In a live telecast, Nasrallah noted that he hoped the resolution would open considerable economic opportunities. He said that now was not the time to seek political gains but focus on unity and solidary. This development does limit Iran from having a much stronger presence in Lebanon because the arrangement brings about better economic relations with the west. The deal additionally notes that the US will intervene in the event of any future disputes between the two sides. However, the agreement does not end any potential confrontation between Israel and Hezbollah in the future. Also, Hezbollah will continue to work closely with Iran, but Nasrallah is well aware of Hezbollah’s waning influence in Lebanon. So, this positive display of public support for the agreement proved a point domestically that national interests supersede political gains. History will judge if this is indeed historic, but there is a fundamental shift in the relations between Israel and Lebanon. These are two countries in a state of war with a history of conflict. They have no diplomatic representation on either side but understand this arrangement’s economic benefits and security guarantees. Regional instability and economic dependence with the Ukraine crisis and the over reliance on Russian gas pits the Eastern Mediterranean as an attractive energy hub for Europe. It is also in Israel’s interest that Lebanon relies on its resources rather than on Iran for its energy needs. In an interview, Lebanon’s chief negotiator Elias Bou Saab said that the potential discovery of gas reserves at Qana prospect would be a “game changer” for Lebanon. The reserve will not only revive the sinking economy but also provide energy to the electric grid that currently provides a couple of hours of power in a day. It will take a while to recognize the advantages of this agreement, but the real question is if this arrangement could pave the way for eventual negotiations on where to draw the country’s land border and perhaps normalize relations between Israel and Lebanon.