Rivalry, Conflict, and Opportunity in Eastern Mediterranean Natural Gas

Abstract

Recent natural gas discoveries in the eastern Mediterranean have begun reshaping the region’s energy balances. But beyond the simple boost in energy supply lies the tantalizing potential for improved political and economic cooperation in a region better known for deadly conflict. Further, the proximity of the gas to the European market made it a strong candidate for replacing Russian gas exports to Europe. However, the path to realizing these opportunities has been a fraught one. High costs associated with deep-water extraction, unresolved political disputes, inadequate infrastructure, and recurrent conflicts have made development and large-scale investment from international oil companies (IOCs) less attractive than opportunities elsewhere. Broadly speaking, the eastern Mediterranean’s energy resources have already led to improved political and economic cooperation amid otherwise tense regional relationships. Over time, development of eastern Mediterranean gas and improved regional connectivity will likely continue to promote limited regional stability and economic development. Even so, this research paper’s findings suggest that these resources are more likely to be consumed in their host countries, with seasonal surplus exported as liquefied natural gas (LNG) from existing Egyptian terminals, rather than serving as substantial sources of export revenue or European energy supply. This paper explores the complex dynamics of eastern Mediterranean energy, highlighting its limitations and potential for improved stability and economic advancement.

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The authors are grateful to Robert Barron and the United States Institute of Peace as well as the Middle East Energy Roundtable — a joint initiative of the Center for Energy Studies and the Edward P. Djerejian Center for the Middle East at Rice University’s Baker Institute for Public Policy — for facilitating the four virtual workshops in 2023 and 2024 that form the basis of this research paper.

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