ISRAEL & RUSSIA COLLABORATION
Israel and Russia are about to agree upon a modus operandi in the East Mediterranean concerning weapons and natural gas deals, several Israeli media reports indicate. According to various assessments, the bottom line of such an agreement would be that Israel will not sell natural gas to Turkey and, in return, Russia won't supply S-300 anti-aircraft missiles and other advanced weapon systems to Iran and other regional enemies of Israel.
The basis for the agreement all started about six months ago when, in a surprise move, Russia deployed about 50 jet fighters, helicopters, and ground forces to a Syrian air base in the northwest of the country. It was the first time in a generation that the Israeli Air Force had to confront an adversary as formidable as the Russian air force, and worse, Israel's interests were threatened by the might of the Russian state on its borders.
For Israel this represented a threat that it had to reduce as much as possible in order to avert a dangerous deterioration into any kind of confrontation, either diplomatic or military. That prudent policy led to the unusual phenomenon that when Russian jet fighters violated Israel's air space, no Israeli response was recorded. It was an unprecedented incident for one of the world's best air forces.
At the same time, relations between Russia and Turkey were rapidly deteriorating because of the two countries' contradicting goals in Syria: Turkey was seeking the removal of Bashar al-Assad, the Syrian president, while Russia was deploying its forces in Syria in order to support him. Following the downing on of a Russian bomber by a Turkish F-16 on November 24 last year, the situation came to a head. Russia imposed sanctions on Turkey and relations sank to a new low. Since then the relationship between Turkey and Russia has remained frozen at best.
However all along Russia, Turkey's largest gas supplier with a market share of over 60%, has maintained its dominant position in the Turkish gas market. That threw up another potential conflict between Israel and Turkey: A few people, in Israel as well as in Turkey, believed that the Leviathan gas field, which has yet to be developed, would be at least a partial alternative to Russian gas and could help Turkey to wean itself off its dependence on Russian natural gas.
For Russia, that situation necessitated some quick political manoeuvring to get Israel on side.
Israel, for its part, faces difficult decisions: Does it prioritise gas deals at the price of its military considerations or should it shun a possibly lucrative gas deal to maintain its military relations with Russia?
Turkey and Israel's negotiations
A potential gas deal between Israel and Turkey has been months in the making. On December 27, Benjamin Netanyahu, Israel's prime minister, approved a new natural gas regulatory framework for the country. That same day, in the evening news on Channel 2, the most watched news broadcast in Israel, a leak revealed that secret negotiations between Israel and Turkey to end the six-year crisis in their relations are ongoing. Since Netanyahu is also the Foreign Minister, the source of the leak appeared to be quite clear as was its timing and purpose: Turkey was presented as the attractive destination for Israeli natural gas.
Now things began to get tangled. The negotiations between Israel and Turkey, always shrouded in secrecy, dragged on for weeks without end. The Israeli Defence Minister, Moshe Ya'alon, said a few times that Israel has its own red lines, which included the shutdown of Hamas command post in Turkey from which terror activities against Israel were ordered, according to Israel. His stance probably gave voice to the Israeli military establishment that prefers maintaining military cooperation with Russia over potential Israeli gas sales to Turkey if they hurt Russian interests and anger Putin.
Meanwhile, Netanyahu said nothing and the Turkish president, Recep Tayyip Erdogan, remained silent in the hope of achieving a deal with Israel that would secure him not only Israeli gas but, more importantly and urgently, Israeli weapons.
Two weeks ago a Kuwaiti newspaper, Al-Garida, which according to Israeli sources is regarded as close to Netanyahu, reported that Turkey was demanding sales of weapons from Israel, as part of the reconciliation agreement, while Israel was demanding that Turkey purchases gas from the Leviathan partnership. It looks like a perfect deal for the former allies, especially for Turkey, which is seeking to break its diplomatic isolation in the Eastern Mediterranean. The American administration also supported that reconciliation agreement between its two most important allies in the East Med, a stance that was expressed by the US Vice President, Joe Biden, on his recent visit to the region.
However as long as the Russians remained in Syria, close to the Israeli border and with great influence on the East Med theatre, those plans were destined to remain pipe dreams, as sales of weapons and natural gas from Israel to Turkey would have contradicted Russia's interests in the region.
Last month President Putin invited Israel's President, Reuven Rivlin, for a state visit to Russia. The presidency in Israel is no more than a ceremonial role on the one hand and the relationship between Netanyahu, the Prime Minister, and Rivlin, the President is mostly bitter. In normal times, Netanyahu would have tried to block that prestigious visit. However, this time, he urged Rivlin to accept Putin's invitation and to cancel a planned state visit to Australia, causing diplomatic unpleasantness between the two countries. However when Putin invites an Israeli President, any answer apart from 'da' would be unacceptable as well as illogical.
So on March 16, just two days after Putin announced the withdrawal of Russian forces from Syria, the two presidents met in Moscow. The most important news item that came out of their meeting was of an impending meeting between Netanyahu and Putin.
Lately, Netanyahu and Putin see each other and communicate with each other frequently. Netanyahu's relations with the Kremlin are much better than with the White House. Following the deployment of Russian forces to Syria in September last year, Netanyahu rushed to Moscow to create a coordination mechanism between the Russian forces in Syria and the Israeli military. Since then, the coordination mechanism has been effectively used and no incidents between military forces of the two countries have been reported, despite the extensive military activity in the region.
(Following the Russian surprise withdrawal from Syria, a new coordination mechanism has to be established between Russia and Israel since, despite the Russian withdrawal, Russian forces will continue to use the air base near Latakia, and the S-400 anti-aircraft missiles system will remain deployed and operational in their region.)
During the period of the first coordination mechanism, Putin, according to an Israelicommentator, said that he would like Russia to be involved with the Israeli natural gas industry, including having interests in the offshore gas fields. Such a move seems doomed because of American interests – American firm Noble Energy operates the Leviathan and Tamar fields, plus others in the area. However, with strengthening relations between Russia and Israel, the Russians are in a position to thwart any Israel-Turkey gas deals.
The Iranian Connection
Russia is also interested in promoting its relationship with Iran following the lifting of the sanctions. A few weeks ago it was reported that Russia has agreed to complete the sale of an S-300 anti-aircraft missile system to Iran, a country which is regarded by Israeli officials as Israel's most dangerous enemy. That deal has infuriated Israel; the Director General of Israel's Foreign Office flew to Moscow for a meeting with the Russian Foreign Minister, Sergei Lavrov. In that meeting, Lavrov said that Russia is disturbed by the recent Turkish-Israeli rapprochement, because of a possible deal between Turkey and Israel on natural gas resources. Nothing was reported about weapons sales but one can assume that this subject was also on the agenda.
Israel doesn't have many choices in how it proceeds. Good relations with Russia, when Russian forces are almost on its borders, seem to be more important to Netanyahu than gas deals with Turkey, despite the fact that Netanyahu is the prime mover behind the gas framework. However if the Russians were to accede to Israel's demands and abolish arms deals with Iran, Israel could reciprocate by not selling either arms or natural gas to Turkey.
The rapprochement, and gas deals with it, will be delayed for another time.
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REUTERS - Brent crude futures LCOc1 were down 72 cents at $61.49 per barrel at 1020 GMT, having fallen by 1.5 percent on Tuesday, its largest one-day drop in a month. U.S. West Texas Intermediate (WTI) crude CLc1 was at $55.12 per barrel, down 58 cents.
BLOOMBERG - Prices dropped during the session as the International Energy Agency said the recent recovery in oil prices, coupled with milder-than-normal winter weather, is slowing demand growth. The worsening outlook for consumption dampened some of the enthusiasm that OPEC and its allies will extend supply curbs.
Global energy needs rise more slowly than in the past but still expand by 30% between today and 2040. This is the equivalent of adding another China and India to today’s global demand.
Product exports have grown significantly over the past several years and are expected to continue to grow as Russian refineries add capacity to produce more high-quality products.