For decades, the geopolitical landscape of the Middle East has been shaped by a delicate balance of formal peace agreements, covert tensions, and the strategic exchange of critical resources. Among these agreements, the relationships between Israel and its southern neighbors—Jordan and Egypt—have long been framed as pillars of stability within the broader framework of a “cold peace.” This equilibrium was built on the assumption that shared dependence on finite resources, such as water and energy, would foster interdependence, making conflict less likely and cooperation more sustainable. However, as regional dynamics shift and new pressures emerge, these once-stabilizing resource flows are now being repurposed as instruments of strategic competition, threatening to redefine the very foundations of Israel’s diplomatic engagements.
The Foundations of Resource-Based Diplomacy
The peace treaties signed between Israel and Jordan (1994) and Israel and Egypt (1979) were not merely political milestones; they were also economic and infrastructural agreements that tied the nations together through shared resource networks. For instance, Israel’s export of natural gas to Egypt and its provision of water to Jordan were not just commercial transactions but symbols of regional integration, reinforcing the idea that economic ties could mitigate political hostility.
Under this model, resource interdependence was intended to:
– Stabilize fragile peace agreements by creating material incentives for cooperation.
– Counterbalance public skepticism toward formal peace treaties, which often remained unpopular domestically.
– Facilitate regional economic growth by enabling cross-border energy and water infrastructure.
Yet, while the peace treaties themselves remain intact, the nature of these resource relationships is undergoing a profound transformation. No longer are water and energy solely tools of integration—they are now levers of strategic leverage, with each party reevaluating its dependencies and vulnerabilities.
[A satellite image depicting the Red Sea-Dead Sea Water Conveyance Project, a critical infrastructure link between Israel, Jordan, and potentially Egypt, illustrating the intertwined resource dependencies in the region.]
The Shifting Sands of Water Diplomacy: Israel and Jordan
Jordan’s reliance on Israel for freshwater supply has long been a contentious yet necessary arrangement. The 1994 Peace Treaty included a water-sharing agreement, with Israel supplying Jordan with approximately 50 million cubic meters of water annually—a lifeline for a country facing severe water scarcity. However, recent developments have introduced new layers of complexity:
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Climate Change and Diminishing Resources
The Jordan River, a primary water source for both nations, has seen declining flows due to droughts and upstream diversions. This has intensified Jordan’s vulnerability, prompting it to explore alternative desalination projects and negotiations with other regional partners, including Iraq and Syria. Israel, meanwhile, has accelerated its own desalination capacity, reducing its historical dependence on Jordanian water. -
Political Tensions and Infrastructure Strain
Jordan has delayed payments for water supplied by Israel in recent years, citing economic pressures. Meanwhile, Israel has restricted water transfers during periods of drought, raising concerns about unilateral control over a critical resource. These actions reflect a growing asymmetry in leverage, where Jordan—once a dependent partner—is now actively seeking diversification of its water sources. -
The Red Sea-Dead Sea Project: A Double-Edged Sword
The Red Sea-Dead Sea Water Conveyance Project, a proposed (and partially operational) pipeline system, was intended to reverse water flow from the Red Sea to the Dead Sea while supplying Jordan with additional freshwater. However, delays, cost overruns, and environmental concerns have stalled progress. If implemented, the project could reduce Jordan’s reliance on Israel, further destabilizing the existing water-sharing dynamic. -
Energy as a New Arena of Competition
While water remains a primary concern, energy security is emerging as another battleground. Jordan has reduced its gas imports from Israel in favor of LNG shipments from Europe and the Middle East, signaling a shift away from historical dependencies. This move not only weakens Israel’s economic leverage but also strengthens Jordan’s bargaining position in future negotiations.
Egypt’s Gas Gambit: From Importer to Regional Power Player
Egypt’s relationship with Israel has always been more transactional than ideological, rooted in mutual economic interests rather than shared political goals. The 1979 Peace Treaty included a gas supply agreement, with Israel exporting natural gas to Egypt—a deal that became even more critical after Egypt’s 2015 discovery of the Zohr gas field, one of the largest offshore deposits in the Mediterranean.
However, Egypt’s sudden reversal in 2021—terminating its gas imports from Israel—sent shockwaves through regional energy markets. The reasons behind this decision were multifaceted:
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The Rise of the Zohr Field and Energy Independence
Egypt’s Zohr gas discovery made it a net exporter rather than an importer. By 2022, Egypt was selling gas to Europe via pipelines and LNG shipments, reducing its need for Israeli supplies. This shift eliminated Israel’s primary energy export market, forcing Tel Aviv to diversify its gas routes to Europe and Asia. -
Geopolitical Realignment with Rival States
Egypt’s strategic pivot toward Iran and Russia—despite maintaining formal peace with Israel—has introduced new layers of complexity. While Egypt continues to cooperate with Israel on security matters (such as counterterrorism and intelligence sharing), its energy diplomacy has increasingly aligned with rivals, including Qatar and Iran, who now supply Egypt with gas. -
The Role of the Eastern Mediterranean Gas Forum (EMGF)
Egypt’s leadership of the EMGF, a regional body aimed at coordinating gas exports to Europe, has positioned Cairo as a key mediator in Mediterranean energy politics. This has reduced Israel’s influence in the region, as Egypt now competes with Israel for European gas contracts rather than relying on Israeli supplies. -
Infrastructure and Pipeline Politics
The Arab Gas Pipeline (AGP), which once transported Israeli gas to Jordan and Egypt, is now operating at reduced capacity. Meanwhile, Egypt is expanding its LNG export terminals to cater to European demand, further marginalizing Israel’s role in the regional energy market.
The Broader Implications: A Cold Peace in Flux
The erosion of resource interdependence between Israel and its southern neighbors is not merely an economic shift—it is a strategic realignment with profound geopolitical consequences:
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The End of the “Peace Dividend” Narrative
The assumption that resource-sharing would sustain peace has been challenged by new power dynamics. As Jordan and Egypt reduce their dependence on Israel, the material incentives for cooperation weaken, leaving only security-based alliances as the remaining glue in the relationship. -
Rising Tensions Over Shared Water Bodies
The Jordan River, the Yarmouk River, and the Dead Sea are all contested water sources where Israel, Jordan, and Syria (indirectly) have competing claims. As water scarcity worsens, conflict over allocation—rather than cooperation—could become the norm. -
Energy as a Tool of Soft Power
Both Jordan and Egypt are now actively courting alternative energy suppliers, from Qatar’s LNG to Russian gas. This diversification strategy not only reduces Israel’s leverage but also strengthens regional rivals, who can now compete with Israel for influence in the Middle East and Europe. -
The Looming Threat of Water Wars
With climate change accelerating water scarcity, the Middle East could see increased tensions over transboundary water projects. Israel’s desalination expansion, Jordan’s desalination and pipeline projects, and Egypt’s control over the Nile’s tributaries (via its role in the Nile Basin Initiative) all contribute to a growing risk of resource-based conflicts.
Conclusion: A New Era of Strategic Competition
The cold peace between Israel and its southern neighbors was once sustained by economic interdependence. Today, that equilibrium is unraveling, replaced by a new resource politics where water and energy are weapons of influence rather than bridges of cooperation.
For Israel, this shift means accelerating its own energy and water security through desalination, nuclear power, and alternative energy sources. For Jordan and Egypt, it means diversifying their dependencies to reduce vulnerability to Israeli leverage.
As these dynamics evolve, the future of the cold peace hangs in the balance—not just on security agreements, but on who controls the lifeblood of the region. The next decade will determine whether resource competition becomes the new norm, or whether a new model of cooperation can emerge in the face of scarcity. One thing is certain: the age of resource-based diplomacy is giving way to an era where strategic autonomy—not interdependence—will define Middle Eastern power relations.
