Turkey and Israel

Charting a New Direction: Turkey and Israel Normalise Ties

On 17 August 2022, Turkey and Israel announced that they would restore diplomatic ties and appoint ambassadors. Signs that the tide was turning were apparent with Israeli President Isaac Herzog’s highly publicised visit to Ankara in March—the first trip by an Israeli head of state to Turkey since 2007. Later in May, Turkish foreign minister Mevlut Cavusoglu visited Israel, the first to do so in nearly fifteen years.

Normalisation has been years in the making, with the involvement of high-level diplomatic liaisons and back-channel diplomacy making slow and incremental progress. Underlying this shuttle diplomacy has been a history of bilateral relations that has proven to be as resilient as it is fragile, with disputes sometimes flaring up suddenly and sometimes being managed with quiet precision. Despite many pundits racing to ring the death knell for Israel-Turkey relations, it was never a foregone conclusion that the strategic relationship was over.

Now, several areas of joint concern preoccupy the trajectory of relations between Ankara and Jerusalem. Turkey faces a looming economic crisis with inflation reaching a record-hitting high of 80.21% in August and is struggling to boost trade and foreign investment.[i] Trade with Israel reached $8.4 billion last year and both partners are keen to enhance the trading partnership. Both sides also wish to limit the influence of Iran and pro-Iranian proxies operating in Syria and the wider region.

The prospect of cooperation over energy resources in the Eastern Mediterranean is also a major area of shared interest. Despite differences over the issue of Hamas and the Palestinians, there is enough to agree on at the current juncture to make reconciliation viable. Turkey’s President Recep Tayyip Erdogan has said that gas cooperation would be ‘one of the most important steps we can take together.’ Both states are keen to play a growing role in meeting Europe’s energy needs as an alternative to Russia.

An Anatomy of a Fraying Alliance

Turkey was the first Muslim majority country to recognise the state of Israel in 1949. Bilateral relations expanded steadily in the areas of defence, intelligence and trade, even if they evolved behind closed doors and beyond the scrutiny of public scepticism on both sides. Relations deteriorated sharply in 2010 when ten Turkish civilians on board the Mavi Marmara were killed during a raid by Israeli navy commandos to stop a flotilla intended to breach the military blockade of Gaza. Erdogan responded by recalling the Turkish ambassador to Israel at the time. The prospect of reconciliation returned briefly when Israel issued an apology to Turkey over the incident in 2013 and extended compensation to the families of the victims. Diplomatic relations, however, were downgraded again in 2018 over the Trump administration’s decision to move the U.S. embassy from Tel Aviv to Jerusalem, and the violence that ensued as more than sixty Palestinians were killed in clashes along the border fence between Gaza and Israel. Turkey declared three days of mourning in solidarity with the Palestinians and condemned Israel’s actions.[ii] Relations have warmed since Turkey abandoned what was dubbed as neo-Ottoman unilateralism in the region, pivoting instead to re-establishing diplomatic ties with its erstwhile ‘frenemies.’

Assessing the ebb and flow between these two strategic neighbours is impossible without taking stock of the interests of the United States. For successive U.S. administrations, a longstanding strategic priority has been promoting strong ties between Israel and Turkey, seen as key to stability in the wider Middle East.

Turkey has embarked on a major pivot as the ruling Justice and Development Party (AKP) made moves to normalise relations with regional actors, including Israel, the United Arab Emirates, Egypt and even Saudi Arabia.

A series of consequential missteps in Turkish foreign policymaking following the ill-fated Arab Spring and the war in Syria dealt a blow to Turkey’s chances of regional influence, whilst eroding its democratic credibility at home. But, over the past year, Turkey has embarked on a major pivot as the ruling Justice and Development Party (AKP) made moves to normalise relations with regional actors, including Israel, the United Arab Emirates, Egypt and even Saudi Arabia. Turkey wants to rebrand itself as a reliable partner and end nearly a decade of international isolation. In addition to the inherent advantages of reconciliation with Israel, Ankara knows that the road to rebuilding trust with the United States has always run through Israel.

For its part, over the last few years, Israel has cultivated diplomatic relations in the Middle East due, in large part, to the Abraham Accords, making it less reliant on the kindness of Turkey as its sole strategic ally. In a sign of the seismic shift in Israel’s dialogue with Arab governments, Israel hosted a summit in the Negev desert in April with senior diplomats from the UAE, Morocco, Bahrain and Egypt, along with U.S. Secretary of State Antony Blinken. Israel has long argued that none of this is at the expense of Turkey, which it continues to see as a strategic ally in a complex geopolitical space. Israeli Foreign Minister Yair Lapid recently said that improved relations with Turkey would help regional stability and were a “blessed chance whose time has come.”[iii]

Eastern Mediterranean Energy Resources

Israel, Egypt and the European Union signed a deal in Cairo to boost gas exports to Europe.

Since the discovery of major offshore gas fields in the Eastern Mediterranean in the 2000s, Europe has recognised the energy export potential of the region that can help reduce dependency on Russian gas supplies. In June, Israel, Egypt and the European Union signed a deal in Cairo to boost gas exports to Europe. This builds on a $15 billion deal agreed in 2018 that allows Israel to export gas from the Tamar and Leviathan offshore gas fields to Egypt, where it is liquefied and shipped to European countries.[iv] According to industry officials, Israel is expected to double its gas output to about 40 billion cubic meters (bcm) annually as it expands projects and brings new fields online.

Israel and Turkey are now seriously considering the options for building a new pipeline.

According to a forthcoming report Navigating a New Direction in the Eastern Mediterranean: What Role for Britain?, Israel and Turkey are now seriously considering the options for building a new pipeline. Whilst this seemed farfetched not long ago, more recent developments have made it a technically feasible, cost-effective solution to moving Israeli gas to Europe, and there are reasons why it could work.

First, in January of this year, the Biden administration withdrew its support for the construction of the EastMed pipeline, long seen as the panacea pipeline that would stretch 1,900 km (1,180 miles) under complex seabed terrain and cost approximately $7 billion to carry gas from Israeli and Cypriot waters to the Greek island of Crete, onto the Greek mainland and into Europe’s gas network via Italy. With the EastMed pipeline now off the table, the possibility of alternative supply routes has gained renewed interest.

Israel and the Republic of Cyprus rely on Egypt’s coastal liquefaction facilities and its pipeline infrastructure.

Turkey’s geography presents it with the most commercially feasible path, along with the existence of add-on pipelines, to transport Israeli gas. Turkey has already developed an expansive infrastructure network, including the $40 billion Southern Gas Corridor, which will carry gas from Azerbaijan’s Shah Deniz field to Europe through the Trans-Anatolian Natural Gas Pipeline (TANAP)—a major section of the gas corridor linking to the South Caucasus Pipeline (SCP) and the Trans Adriatic Pipeline. One option is for gas to be transported from Israel’s Leviathan field to Turkey, after which point the Israeli supply could be moved to Europe via the Southern Gas Corridor, a series of pipelines transporting natural gas from the South Caucasus to the Balkans. With no gas export infrastructure of their own, Israel and the Republic of Cyprus rely on Egypt’s coastal liquefaction facilities and its pipeline infrastructure to ship their volumes abroad as liquefied natural gas (LNG).

According to a senior diplomatic source in Ankara, Turkey sees “no obstacles to energy cooperation with Israel. High-level conversations are ongoing and outcomes will formalise over time. We are keeping our lines of diplomacy and partnership open.”[v]

A long-standing hurdle to Israel’s plans has been that the Leviathan field lies inside 860 square kilometres of an area unilaterally claimed by Israel and disputed by Lebanon. On 31 August 2022, President Joe Biden “emphasized the importance” of resolving the maritime border dispute between Israel and Lebanon in his call with Israeli Prime Minister Yair Lapid.[vi] According to sources, Jerusalem anticipates that a solution to the decade-long maritime demarcation dispute with Lebanon is expected to come about sooner rather than later.[vii]

A resolution of the Israel-Lebanon maritime border dispute can set an important precedent for other maritime boundary arrangements elsewhere in the region.

Gabriel Mitchell, Policy Fellow at the Mitvim Institute, told me via email that whilst there is no direct link between a resolution of the Israel-Lebanon maritime border dispute and prospects of a pipeline deal between Israel and Turkey, if achieved, the former can set an important precedent for other maritime boundary arrangements elsewhere in the region. Although Turkey and Lebanon are not coastal neighbours, Ankara is aware that an agreement will serve its own ambitions for working with both Israel and Lebanon over energy exports. Paying Lebanon a transit fee, for example, is one option that comes up among policymakers to move Israeli gas to Europe via Turkey.

There are undoubtedly challenges ahead that Turkey and Israel must overcome. The EU’s 2050 net-zero target limits the expected commercial lifetime of a new pipeline built to deliver natural gas to Europe, raising the prospect of creating stranded assets. This renders it financially unattractive to construct a new pipeline at this juncture from the Eastern Mediterranean to Europe, which is why the EastMed pipeline project was abandoned. Using or adapting existing pipelines, existing or new LNG liquefication infrastructure, or a combination of these may be the most commercially viable and expedient option.

According to Eser Özdil, a non-resident fellow at Atlantic Council in Turkey, rapprochement makes energy a positive agenda item in bilateral relations. He argues that “This may create a win-win situation for all regional actors while the world is experiencing a major natural gas crisis. This regional impact may not only be limited to the delivery of Israeli gas to the international markets but may also pave the way for faster monetisation of energy resources of other countries in the region, especially Egypt.”[viii]

The hope is that shared economic interests can stunt the influence of political disputes between Turkey, Israel and other coastal states. According to Michael Bradshaw, professor of global energy at Warwick Business School and a co-director at the UK Energy Research Centre, it is surprising that diplomatic agreements are perceived to result in significant commercial investments. After all, it is energy companies, not states, that directly decide on gas infrastructure investments, and must weigh options as the projects will face global competition for capital investment and buyers.

Another major challenge is that any gas pipeline from Israel to Turkey would necessarily have to pass through the maritime Exclusive Economic Zone (EEZ) claimed by Cyprus. With the Greek and Turkish Cypriots in disagreement over a comprehensive settlement on the future of the island, involving Cyprus in an energy deal that includes Turkey would be difficult.

However, there is scope for the US and Britain to jointly exercise constructive diplomacy to persuade Cyprus, an EU member, that it is in the interest of Europe and its allies for this pipeline project to proceed.[ix] In the immediate term, Britain would be well-placed to support closer cooperation in the field of energy between Israel and Turkey, two allies with which Britain has reliable and strategic relations in an otherwise challenging neighbourhood. Reaching an agreement to transport Israeli gas to Europe via existing pipeline infrastructure through Turkey could provide shared benefits. Britain could use its levers of influence to facilitate an agreement between its allies, which would amplify its role in the Eastern Mediterranean region and the wider Middle East, resonating also with countries like Egypt and Lebanon. In the area of hydrocarbon diplomacy, it is difficult to envision how meaningful gains can be made in the absence of collective risk-sharing by states with a stake in the energy game.

[i] Butler, Daren, and Canan Sevgili, “Turkey’s inflation hits new 24-year high beyond 80%.” Reuters. 5 September 2022. https://www.reuters.com/world/middle-east/turkeys-inflation-touches-new-24-year-high-802-2022-09-05/.
[ii] Ozcelik, Burcu. “Overcoming hurdles to Turkish–Israeli reconciliation.” International Institute for Strategic Studies. 6 May 2022. https://www.iiss.org/blogs/analysis/2022/05/overcoming-hurdles-to-turkish-israeli-reconciliation.[iii] “Israeli FM says boosting relations with Turkey will increase regional stability.” The New Arab. 6 April 2022. https://english.alaraby.co.uk/news/better-turkey-relations-will-boost-stability-israeli-fm.
[iv] Ozcelik, Burcu. “Are Greece and Turkey Locked in a Mediterranean Forever War?” The National Interest. 19 July 2022. https://nationalinterest.org/feature/are-greece-and-turkey-locked-mediterranean-forever-war-203657.
[v] Personal interview, 6 September 2022.
[vi] Ravid, Barak. “Biden “emphasized importance” of resolving Lebanon-Israel maritime dispute in Lapid call,” Axios, 31 August 2022. https://www.axios.com/2022/08/31/resolving-lebanon-israel-maritime-dispute-a-key-priority-us-says.
[vii] Personal interview with author, anonymous source, 5 September 2022.
[viii] Personal interview with author, 4 September 2022.
[ix] Personal interview, anonymous, 5 September 2022.

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