According to the US based IDT Corporation, which holds the exploration rights in the Shfela Basin together with the domestic Israeli Energy Initiatives (IEI), there is even more shale oil below Israel’s surface, perhaps twice as much as the reserves of Saudi Arabia. As if this was not enough, very large gas deposits in the Eastern Mediterranean have been discovered and extraction started by Israel and others. The so called Levantine Basin, which the until now fossil energy poor Greece, Cyprus, Syria, Lebanon, Israel and Gaza all make claims on, holds a virtual gas Eldorado below the seabed which the US Geological Survey estimate to at least 120,000 billion cubic feet. Of that, some 8,500 billion cubic feet are calculated to be in the Tamar field outside Israel’s northern coast and some 20,000 billion cubic feet in the Leviathan field out at sea, which borders or is partly within Lebanese territorial waters. In April, the first commercially produced gas was delivered from the Tamar field for further distribution on the market. Russian gas companies have also shown interest in the deposits in the Levantine Basin, and state-owned Gazprom has already entered an agreement with Israel to buy gas and has bid for exploration rights. When president Vladimir Putin went on state visit to Israel last year, oil and natural gas was the major topic, which may have been the reason why Putin at the prayer site by the Western Wall in Jerusalem said some very unusual words for a normally Palestinian friendly Russian statesman: “You can see how the Jewish past is engraved in the stones of Jerusalem.” Putin’s wheedling phrases can in the most generous case be interpreted as the predictive statesman’s – in a new situation where the vast Russian natural gas reserves will most likely meet hard competition. How the leaders of oil and gas giants such as Saudi Arabia, Iraq, the UAE or Iran will meet the new energy challenges from Israel will be very interesting to see. If the Chinese and Indian economic growth miracles continue, the energy exporters in the Persian Gulf will probably not have any major challenges to sell their black gold even in the future. But the price on both oil and gas should reasonably stabilize or even sink, at least in fixed prices, as a result of the newfound deposits. It can create serious problems for the Saudi royal family to continue with its wasteful state economy that has conserved Saudi Arabia’s medieval social structure. And the ayatollahs’ Iran could with stagnating energy incomes be forced to lower their ambitions to become the hegemon of the Persian Gulf region. The US’ and the rest of the Western world’s oil imports from the Arab states will drastically fall as a result of the extraction of own shale oil, which should also stir up the power relations in the Middle East. Saudi Arabia, which since the end of World War II has been able to lean on Uncle Sam’s protecting military hand, will most likely not be able to count on that Washington always prioritizes the interests of Saudi and the oil emirates. In the long run, this could benefit the Iranian leaders who in parallel with other Middle Eastern conflicts have been involved in a historic rivalry with the KSA about who rules the roost in the region. But at the same time, this is a horrifying scenario for Israel: with an energy self-sufficient US that partly retreats to within its own shell, Israel’s sandwiched position between a number of poorer and historically grudging Arab states can be more exposed than ever.
