2023 Research and Study
- Commentary
- publication date:2025/07/15
The Gaza Crisis and Israel’s Energy Security
MEIJ Commentary No.10
Masahide Takahashi,
Senior Research Fellow, MEIJ
1. Introduction
Since October 2023, the Gaza crisis has continued and Iran and the armed groups it supports have increased military operations against Israel, significantly undermining Israel’s security. Against this backdrop, concerns have been raised regarding the potential impact of the Gaza crisis on Israel’s energy supply. Israel successfully developed offshore gas fields in 2010, dramatically increasing gas production. Consequently, it established a self-sufficient gas-supply system and strengthened its position as a gas supplier by exporting to Egypt and Jordan. However, Israel remains dependent on foreign sources for petroleum (crude oil and petroleum products), with its crude oil import dependency reaching 96% by 2023.
For Israel, energy security means not only securing a stable supply of fossil fuels (oil, coal, and natural gas) at reasonable prices but also preventing attacks on energy facilities by hostile nations or non-state actors. This study examines trends in Israel’s natural gas industry and the importance of Israeli gas for Egypt and European countries, and considers the impact of the Gaza crisis on Israel’s oil and natural gas procurement. It also considers the future of energy cooperation between Israel and Azerbaijan, a key crude oil supplier to Israel.
2. The natural gas industry supporting Israel’s energy policy
Since its establishment in 1948, Israel has faced the challenge of securing a stable supply of fossil fuel. This situation was transformed by the successful development of offshore gas fields, with Israel discovering large reserves in 2010. Production began in the Tamar gas field in 2016, followed by the Leviathan gas field in 2019, and the Karish gas field in 2022. Gas production increased from 10.3 billion cubic metres (BCM) in 2017 to 27.1 BCM in 2024, making the natural gas industry a valuable source of revenue for the government. By 2024, gas-related revenue increased by 11% annually, reaching 670 million dollars. By the end of 2020, the proven gas reserves were estimated at 600 BCM, giving Israel a reserve-to-production ratio (R/P) of approximately 40 years, indicating its continued potential as a gas-producing nation.
Increased natural gas production has played a key role in ensuring stable electricity supply in Israel. Until 2012, Israel’s power mix was centered on coal- and oil-fired power generation. However, since then, gas production for power generation has significantly increased, resulting in a corresponding increase in gas-fired power generation. In 2023, gas-fired power generation accounted for approximately 70% of the total power mix (see Figure 1).
Figure 1: Electricity generation by power source in Israel
(Source: Created based on data from the International Energy Agency)
3. Israeli gas for Egypt and Europe
The development of gas fields in Israel has been significant for Egypt and Europe. Since 2020, Egypt has imported Israeli gas through the East Mediterranean Gas Pipeline (EMG). This undersea pipeline connects the southern Israeli town of Ashkelon to the Egyptian town of Arish on the Sinai Peninsula. Before importing gas from Israel, Egypt primarily sourced liquefied natural gas (LNG) from Qatar. In response to the rising demand for gas in 2015, Egypt deployed two floating LNG storage and regasification units (FSRUs) at the port of Ayn Sukhna and began importing LNG. Following the start of production in the Zohr gas field on the Egyptian coast in 2017, the country’s gas self-sufficiency rate improved, leading it to halt LNG imports in 2019. However, despite the increased domestic gas production, Egypt began importing gas from Israel in 2020, and its reliance on Israeli gas for gas procurement has grown annually. As of 2023, Israeli gas imports accounted for 14.3% of Egypt’s total gas consumption (see Figure 2).
Egypt continues to import Israeli gas for two main reasons: (1) gas imports via pipelines are generally cheaper than LNG imports, and (2) importing Israeli gas enables Egypt to expand its LNG exports. First, the costs of importing LNG include liquefaction fees and transportation costs via LNG ships. By contrast, pipelines offer the advantage of transporting gas in its gaseous state, thereby reducing liquefaction and transportation costs. Therefore, importing Israeli gas through pipelines is economically advantageous for Egypt. Second, Egypt is the only country along the eastern Mediterranean coast with LNG production facilities, and has been exporting Israeli gas to European countries after liquefying it based on a memorandum of understanding signed with Israel and the EU in June 2022. Egypt could maintain and expand its gas exports by supplying Israeli gas to its domestic market and exporting surplus domestic gas as LNG. Following Russia’s invasion of Ukraine in February 2022, Europe sought to reduce its dependence on Russia for energy, and Egypt, located across the Mediterranean Sea, was expected to become an alternative gas source. Egypt’s gas exports to Europe reached 6.6 BCM in 2022, with Turkey, Spain, France, and Italy being the main destinations. Therefore, Israel’s gas exports to Egypt contribute to the gas procurement efforts of European countries, reducing Russian gas imports.
Figure 2: Egypt’s gas production, consumption, and exports, and imports of Israeli gas
(Source: Created based on data from the Energy Institute and the Israeli Ministry of Energy)
4. Israel’s natural gas industry shaken by the Gaza crisis
Regarding the impact of the Gaza crisis on Israel’s natural gas industry, although gas production and transportation activities were temporarily suspended, no major disruptions have occurred thus far. Following the outbreak of fighting in October 2023, the U.S. company Chevron suspended production in the Tamar gas field and operations in the EMG pipeline between Israel and Egypt for approximately one month, citing safety concerns that resulted in decreased gas production in the Tamar and Leviathan gas fields in 2023 compared to the previous year. However, production in the Karish gas field increased significantly, from 0.3 BCM to 4.4 BCM, ensuring the stability of Israel’s overall gas production (see Figure 3).
Figure 3: Production volume of each gas field in Israel
(Source: Created based on data from Israel’s Ministry of Energy)
Additional natural gas produced in the Karish gas field was supplied domestically. Natural gas from the Tamar and Leviathan fields continued to be exported to Egypt and Jordan. Consequently, Israel’s natural gas exports to these countries have increased steadily, even during the Gaza crisis. They rose from 9.2 BCM in 2022 to 11.5 BCM in 2023 and reached 13.2 BCM in 2024 (see Figure 4).
Figure 4: Israel’s gas production and gas exports to Jordan and Egypt
(Source: Created based on data from Israel’s Ministry of Energy)
Despite increased gas production amid the Gaza crisis, attacks that threaten the safety of Israeli gas facilities have occurred. In December 2023, the Iraqi Shiite militia “Iraqi Islamic Resistance Movement,” which is linked to Iran, attempted a drone attack on the Karish gas field, although no significant damage was caused. The Karish gas field was previously targeted in a maritime attack by Lebanon’s Hezbollah in July 2022, and remains a target for the “axis of resistance” forces. If the Karish gas field is attacked again and operations are forced to cease, there could be a significant decline in Israel’s gas production and exports.
In addition, Iran’s attack on Israeli territory on October 1, 2024, hindered future gas field development. In response to heightened safety concerns regarding gas facilities, Chevron and the Israeli companies NewMed Energy and Ratio Energies announced that they would suspend the expansion project at the Leviathan gas field for six months. This project aims to increase the field’s annual production from 12 BCM to 21 BCM and expand its export capacity. Following Iran’s attack on Israel with ballistic missiles on 1 October, Chevron temporarily suspended production in the Leviathan and Tamar gas fields as a precautionary measure, although production resumed the following day. However, Iran’s precise targeting of Israeli military facilities and the inadequacy of Israel’s missile defence system in intercepting the missiles have raised concerns regarding the continued operation of the gas field project. If the hostilities between Israel and Iran resume, the expansion plan and new development projects for the gas field could face further delays.
5. The Gaza Crisis and Israel’s Oil Procurement
In contrast to natural gas, which can be produced domestically, Israel imports almost all its oil from overseas. Therefore, securing a stable oil supply is a priority. Currently, oil accounts for approximately 50% of Israel’s primary energy supply. Although the proportion of natural gas increased from 20% to 35% between 2013 and 2023, the proportion of oil remained virtually unchanged (see Figure 5). Thus, oil continues to play a crucial role in Israel’s energy supply system.
Figure 5: Composition of primary energy supply in Israel
(Source: Created based on data from Israel’s Central Bureau of Statistics)
Iran attempted to disrupt Israel’s oil supply during this crisis. In October 2023, it called on the member states of the Organisation of Islamic Cooperation (OIC) to impose an oil embargo on Israel. However, other oil-producing countries did not follow Iran’s lead and an embargo was not implemented.
Before the Gaza crisis, Israel had secured alternative sources of crude oil from Iraq, which is under Iranian influence. This helped prevent the disruption of the oil supply. In Iraq, the Kurdistan Regional Government (KRG) has been developing oil, independent of the federal government in Baghdad in the northern region. An oil pipeline connecting Iraq and Turkey was completed in 2013, and crude oil exports from the Kirkuk oil field in the KRG-controlled region to Turkey’s southeastern port of Ceyhan began in May 2014. Oil production in the region averaged 400,000–500,000 barrels per day (bpd) between 2017 and 2022, with major export destinations including Israel, Europe, and China. However, in May 2023, an international arbitration court ordered Turkey to compensate Iraq for the damages incurred due to its transportation of oil from KRG-controlled areas without the federal government’s approval in Baghdad. Consequently, the operations of the Iraq-Turkey oil pipeline were suspended, hindering the export of oil from KRG-controlled areas. This also led to the interruption of crude oil supply from Iraq to Israel.
Kazakhstan and Azerbaijan are the main suppliers of crude oil to Israel. According to S&P Global data, these two countries accounted for more than half of Israel’s crude oil imports from January to October 2023. Other sources of crude oil imports included Egypt and West African countries such as Gabon and Nigeria, while petroleum products were imported from India and the United States.
Cooperation with Azerbaijan is particularly important for Israel’s oil procurement process. Israel imports crude oil from Azerbaijan via the BTC pipeline, which runs from Baku, Azerbaijan’s capital, through Tbilisi, Georgia’s capital, to the port city of Ceyhan in southeastern Turkey. Additionally, the BTC pipeline is used to import crude oil from Kazakhstan. Kazakhstan transports crude oil produced at the Tengiz oil field via the CPC (Caspian Pipeline Consortium) pipeline to the Russian Black Sea port of Novorossiysk. From there, it is transported by tanker to the Turkish port of Samsun and finally by land to the port of Ceyhan. However, owing to the high transportation costs and longer transit times associated with this route, Kazakhstan also utilizes an alternative route involving transporting its crude oil by tanker to Baku on the opposite shore of the Caspian Sea and then via the BTC pipeline to Ceyhan. Consequently, the BTC pipeline is a vital lifeline for Israel’s oil supply, transporting crude oil from both Azerbaijan and Kazakhstan.
Figure 6: Crude oil export routes from Azerbaijan and Kazakhstan to Israel
(Source: Created based on information from various media sources)
6. Outlook: Energy Cooperation between Israel and Azerbaijan
Israel and Azerbaijan have strong ties based on oil supplies and are close allies in terms of military and security. Israel exports weapons to Azerbaijan and even provided them with drones during the Second Nagorno-Karabakh War in 2020.
Given this close relationship, Azerbaijan is expected to play a significant role in the development of gas fields in Israel. In January 2025, Azerbaijan’s state-owned oil company SOCAR acquired a 10% stake in the Tamar gas field from Union Energy, which is owned by an Israeli businessman. This move enabled SOCAR to enter the Israeli natural gas industry. In March of that year, NewMed Energy, SOCAR, and British BP signed an agreement to conduct geological surveys over the next three years in Zone 1, an offshore area north of the Leviathan gas field, with the aim of developing new gas fields. Azerbaijan has been developing its own gas fields for many years and has accumulated extensive technical expertise and knowledge. By leveraging this expertise, Azerbaijan could be successful in developing gas fields in Israel as well. If gas production increases significantly through the development of new gas fields, Israel could further enhance its status as a gas supplier, thereby strengthening the energy relationship between the two countries.
*MEIJ Commentary is a timely commentary on current affairs by MEIJ research fellows and external committee members. It focuses on the restructuring of the regional order in the Middle East and great power-led connectivity strategies.
*Views expressed in this article are the author’s own and do not represent the views or opinions of the author’s current and/or former employer(s).
Author’s Biography
Masahide Takahashi is a Senior Research Fellow at MEIJ.
