How the “new” Eastern Mediterranean can serve as a bridge between the Gulf and Europe

According to a 2021 assessment by the United States Geological Survey, the combined discovered and potential gas reserves in the region are comparable to those in the North Sea.[i] Major gas discoveries in the Eastern Mediterranean — namely, the Tamar (in 2009) and Leviathan (in 2010) fields near Israel, the Aphrodite field off Cyprus (in 2011), and Zohr close to Egypt (in 2015) — were initially met with optimism. It was hoped that these new gas reserves would spur regional economic cooperation and ease political tensions. The discovery of the Aphrodite gas field off Cyprus was especially welcomed, promising a prosperous future for the nation and the region.

However, this optimism gave way to geopolitical tensions. The declared maritime zones intersect, creating a tangled pattern that complicates the exploitation of the reserves. The delimitation of these zones has proven to be a contentious and difficult political issue, as it involves both sovereign rights and economic interests. Turkey’s refusal to acknowledge Cyprus’s sovereignty over its offshore resources underscored the intricate interplay between ambitious energy plans and the geopolitical complexities shaping the region.

As the contest for new gas reserves intensified, three conflicts — the Cyprus issue, the Greece-Turkey maritime border dispute, and the Libyan civil war — intertwined, heightening tensions in the Eastern Mediterranean.[ii] In the period spanning 2019-2020, the region faced continual minor crises, involving competing drilling operations, exploration activities, maritime disputes, and naval confrontations. In mid-August 2020, a Turkish and a Greek warship collided in the Eastern Mediterranean[iii], escalating tensions in the most volatile naval confrontation the region experienced in two decades.

Responding to the turmoil unleashed by the 2011 Arab Spring, the Gulf states — particularly Saudi Arabia, the UAE, and Qatar — sought to assert their interests in the Eastern Mediterranean, beyond their traditional sphere in the Arabian Peninsula. As disputes over the utilization and distribution of gas reserves escalated, these three Gulf monarchies became increasingly enmeshed in a competition blending geopolitical and geoeconomic dimensions. Saudi Arabia and the UAE forged alliances with Egypt, Greece, and Cyprus, along with France and Italy, to counterbalance Turkey’s regional ambitions and protect their own interests in the Mediterranean. Meanwhile, shared security concerns and strategic interests led Saudi Arabia and the UAE to foster military cooperation with Greece.

The involvement of Gulf countries in the Libyan civil war illustrates the convergence of geopolitical and geoeconomic factors in this complex trans-regional struggle. External support for opposing factions — the UAE, Saudi Arabia, and Egypt backing the Libyan National Army (LNA) led by Khalifa Haftar, and Turkey and Qatar supporting the Government of National Accord (GNA) based in Tripoli — turned Libya into a proxy battleground. The 2019 signing of a controversial maritime boundary agreement between Turkey and the GNA, which expanded Turkey’s claims, directly challenged the interests of Greece, Cyprus, and their allies. This action galvanized their resistance to Turkish exploration in disputed waters and solidified their support for alternative energy projects. Ultimately, the efforts by both blocs to secure advantageous positions in exploiting energy resources further entrenched their geopolitical rivalries.

From heightened tension towards de-escalation

Leading up to the October 7, 2023, Hamas attack on Israel and the resulting war in the Gaza Strip, the dynamics within both the Gulf and the Eastern Mediterranean had begun to shift markedly from heightened tension towards de-escalation. A key development in this context was Turkey’s pivot towards the normalization of relations with Egypt, Saudi Arabia, and the UAE, driven by increasing economic challenges[iv] and political isolation.[v]

A significant milestone in this regard was the Turkey-Egypt rapprochement, which gained momentum in 2021 and reached a climax with Turkish President Recep Tayyip Erdoğan’s historic visit to Cairo in February 2024.[vi] Turkey had leveraged hard power and coercive diplomacy to impede the full exploitation of Eastern Mediterranean energy resources. Its attempts to establish primacy or at least influence over the plans of smaller neighbors had contributed to the region’s volatile and unpredictable political environment. With Turkey having scaled back its support for the Muslim Brotherhood[vii], the thaw in relations with Egypt has translated into a willingness on both sides to take a cooperative approach to achieving political stability in Libya.[viii] Improved dialogue with Egypt might also allow Ankara to further its interests through the Eastern Mediterranean Gas Forum (EMGF), from which it has been excluded.

Meanwhile the Gulf Cooperation Council (GCC) states have made significant progress of their own in mending fences since the January 2021 al-Ula summit, which ended the Saudi- and Emirati-led blockade of Qatar. Self-destructive intra-Gulf feuds and military interventionism have been replaced by constructive diplomatic activism.[ix] The Saudi-Iranian détente brokered in March 2023 by China and Iraq has reinforced this trend.[x] The Gaza War has added momentum to GCC states’ efforts to reconcile with one another[xi] and help bring regional conflicts under control.

These positive advancements have extended into intra-East Med and trans-regional Gulf-East Med relations. Following the renewal of full Israel-Turkish diplomatic relations in 2022, there was a notable emphasis by Turkey on the potential for gas cooperation with Israel.[xii] In February 2023, Israel and Lebanon finalized an agreement[xiii], facilitated by the United States, to establish a permanent maritime boundary, removing a major barrier to exploiting the region’s hydrocarbons potential. The next month, Turkey and the Gulf Cooperation Council (GCC) reportedly agreed to begin formal negotiations toward a Free Trade Agreement (FTA).[xiv] After repairing relations with Athens[xv], Ankara has entered the concluding phase of its regional normalization campaign, as the two sides have decided to compartmentalize their differences and focus on a “positive agenda.”

The Gulf’s Energy Majors Establish Their Foothold

The de-escalatory trend has not led to a withdrawal of Gulf activities in Eastern Mediterranean affairs but rather to their reorientation, with economic issues now taking precedence. The Gulf’s NOCs, as part of their internationalization strategies[xvi], have spearheaded the expansion of Gulf Arab states’ presence in the Eastern Mediterranean.

Out of the three Gulf powers, the UAE is the country that has sought to play the largest role in the Eastern Mediterranean. In addition to its involvement in Libya and Egypt, as well as its growing relationship with Cyprus and Greece, the 2020 Abraham Accords with Israel firmly cemented the UAE’s influence in the Eastern Mediterranean, combining both soft and hard power elements. The Abu Dhabi National Oil Company (ADNOC) and Mubadala Petroleum, also headquartered in Abu Dhabi, have led the UAE’s efforts to gain a foothold in the East Med energy sector.

Mubadala Petroleum purchased a 22% stake in the Tamar offshore field[xvii], a deal that was finalized in September 2021. Mubadala also owns 10% of Egypt’s biggest gas field Zohr, and 20% of Egypt’s as-yet-undeveloped smaller Nour discovery. In February 2023, Adnoc Distribution, the UAE’s largest fuel and convenience retailer, acquired a 50% stake in TotalEnergies Egypt[xviii], marking the Abu Dhabi company’s entry into Egypt, as part of its plan to expand regionally. Meanwhile, ADNOC has entered a joint venture with BP focused on developing new gas resources in the Mediterranean.[xix] The two companies have committed to acquiring Israel’s NewMed[xx], the largest shareholder in the Leviathan gas field, though the deal is on hold pending the Gaza conflict.

The Egyptian Natural Gas Holding Company (EGAS), which holds stakes in Egypt’s two LNG export plants and various gas field assets, has created a subsidiary in Saudi Arabia (Modern Gas Saudi Arabia) to attract additional investment.[xxi] Saudi Arabia’s ambitions extend internationally, with Saudi companies increasingly participating in ventures beyond their borders. It is possible that Saudi corporate entities, including Aramco, will engage in hydrogen production in Egypt and invest in Lebanese offshore projects in the coming few years.

Concurrent with massive domestic expansion in gas and LNG capacity, QatarEnergy has initiated a major international upstream drive. As part of this campaign, the company has sought to establish a foothold that includes expanding its presence in the Eastern Mediterranean and potentially secure a share in future gas sales to Europe. In December 2021, Qatar Energy and ExxonMobil signed an agreement with Cyprus for energy exploration and production sharing.[xxii] Since then, QatarEnergy has acquired the rights to six exploration blocks in Egypt’s deepwater offshore[xxiii], solidifying its position in Egypt’s upstream sector. Last year, QatarEnergy — replacing Russia’s Novatek — joined TotalEnergies and Eni in a three-way consortium to explore oil and gas in two maritime blocks off the coast of Lebanon.[xxiv]

A Wider Aperture