October 19, 2022

IntelBrief: U.S. Brokers Major Israel-Lebanon Sea Border Agreement

AP Photo/ Tsafrir Abayov

Bottom Line up Front

  • Last week’s announcement that the governments of Israel and Lebanon had agreed to their sea border could restructure political alignments in the Middle East region.
  • The pact provides for revenue-sharing between the two countries to facilitate Lebanon’s development of a key natural gas field.
  • The sea border agreement deals a setback to the Iran-led regional “resistance axis,” a key component of which is the powerful Lebanese political party and militia force, Hezbollah.
  • The deal, if implemented successfully, could pave the way for additional agreements on Israel-Lebanon land borders and political relations over the long term.

Last week, Israeli and Lebanese senior officials announced that they had accepted a U.S.-mediated agreement on the maritime border between the two countries, which remain technically at war with one another. U.S. President Joseph Biden immediately issued a statement hailing the agreement and referencing the potential broader implications for the Middle East and for global energy policy, stating: "Energy—particularly in the Eastern Mediterranean—should serve as the tool for cooperation, stability, security, and prosperity, not for conflict." President Biden congratulated Israeli caretaker Prime Minister Yair Lapid and Lebanese President Michael Aoun on the agreement, adding in his official statement that: "This agreement also protects Israel’s security and economic interests critical to promoting its regional integration. It provides Lebanon the space to begin its own exploitation of energy resources." Although it will take years before exploration of gas fields in the disputed territory provides energy to consumers, the deal is anticipated to reduce the impact of last week’s OPEC+ announcement and soaring global energy prices. As skyrocketing gas prices have fueled both a cost-of-living crisis and political instability in several countries as winter approaches, analysts hope that the deal will provide Europe with a potential new source of energy and mitigate tensions.

Once ratified, the agreement, which has been under periodic negotiation for a decade, will allow the beginning of natural gas exploration in the disputed area, a potentially gas-rich, 330-square-mile area in the eastern Mediterranean Sea with an estimated value reaching billions of dollars. The provisions of the deal will permit Israel to proceed with the development, already at an advanced stage, of the Karish field that extends partly into sea territory claimed by Lebanon. In return, Israel will permit Lebanon to develop the large Qana natural gas field, which partly extends into Israel’s sea territory under the newly agreed border, in exchange for a portion of the revenues earned by Lebanon from that field. However, the Qana development depends on reaching a revenue-sharing agreement between Israel and the proposed main operator of the field, French energy major TotalEnergies. The agreement required painful concessions by both sides, and, as a result, the deal faces significant opposition among hardliners in both countries. President Biden sought to pre-empt such criticism of the deal in his statement, saying: "It is now critical that all parties uphold their commitments and work towards implementation." A senior Biden administration official told reporters that the U.S. has "every expectation that this agreement is going to be signed and put into force as quickly as possible... [because it] delivers such critical wins for both sides." Illustrating both the complexity and difficulty of brokering the agreement, Israeli sources said that the United States helped overcome last-minute hurdles by pledging its commitment to Israel’s security and economic rights if Hezbollah decides to challenge the signed agreement. Hezbollah had threatened war if Israel to moved forward with efforts to drill in the Karish gas field before a deal was in place or if the proposed deal did not respect Lebanon's rights in full.

The completion of the agreement represents a clear setback for Hezbollah, which is the strongest armed force and a significant political actor within Lebanon, as well as for the broader Iran-led “resistance axis.” The coalition includes the regime of President Bashar al-Assad of Syria, which has long dominated Lebanese politics through political and armed interventions and blocked any Lebanese rapprochement with Israel. Hezbollah, its patrons in Tehran, and the Assad regime in Damascus all viewed the sea border negotiations as furthering the prospect for an eventual Lebanon-Israel normalization of relations, a prospect President Aoun has adamantly refuted. Yet, if such an outcome were to occur, it would help the United States and its allies outflank and isolate the Iran-backed anti-U.S. and anti-Israel “axis.”

The inability of the "resistance axis" to block the deal could signify an erosion of its influence in Lebanese politics. The willingness of Lebanese leaders to override Hezbollah’s objections to the deal could indicate that the group was politically weakened by its underperformance in the May 2022 Lebanese parliamentary elections. Further, Lebanese leaders are no longer beholden to Assad, whose regime has been undercut by more than a decade of brutal civil war, including alleged war crimes and crimes against humanity, and the mass displacement of millions of Syrians, as well as Lebanese resentment of its past interference in Lebanon. The engine of the resistance axis, the Islamic Republic of Iran, has been significantly tarnished over the last few weeks by a sustained, women-led domestic uprising that has challenged the regime to a degree not seen since 2009. Moreover, U.S. pledges to secure the agreement included a condition that no revenues from Lebanon’s development of the Qana field reach Hezbollah, reflecting Washington’s intent that the sea border deal serves the additional purpose of weakening Hezbollah and its patrons. Labeled by the United States as a Foreign Terrorist Organization (FTO), the group remains subject to comprehensive U.S. financial and economic sanctions.

Israel and Lebanon have several significant land border disputes and other unresolved issues related to Israeli military interventions in south Lebanon during the 1980s and 1990s. Hezbollah is particularly dominant in largely Shia south Lebanon, and the party could be expected to resist any Israel-Lebanon land border deals that require Lebanese compromises. According to many experts, Hezbollah may consider sparking another war against Israel to prevent Lebanese leaders from building political and security ties to Israel, as several other Persian Gulf and Arab states have done. Yet, the failure of Hezbollah and its patrons in Tehran and Damascus to block the sea border agreement provides cause for optimism that Lebanon, over the longer term, may join the broader Arab move toward open relations with Israel.