Dr. Elai Rettig
BESA Geo-Energy Insights No. 8, Apr. 9, 2025
“Now that Israel is seeking new markets for its natural gas, Azerbaijan’s participation in exploration efforts in Israeli waters could serve as a vital energy bridge between Israel and Turkey.”
A significant development in the Eastern Mediterranean energy landscape recently took shape as Israel finally approved an offshore gas exploration license to a consortium comprised of British energy giant BP, Azerbaijan’s state oil company SOCAR, and Israel-based NewMed Energy. The license was granted in Zone I, an approximately 1,700 square km area in the northernmost part of Israel’s economic waters. It was put up for offer as part of Israel’s fourth bid round in 2022 and awarded to the three companies in October 2023, but the tender was frozen due to the eruption of the Israel-Hamas war. Despite concerns that the deal might never be implemented, recent joint statements from Israel’s Energy Ministry and Azerbaijan’s Minister of the Economy suggest that the tender is finally moving forward.
In addition to the strong vote of confidence BP is offering in Israel’s gas prospects by following through with the tender, SOCAR’s decision to press ahead as operator of the project amid the Israel-Hamas war reaffirms the deepening ties between Israel and Azerbaijan. This partnership is built on longstanding mutual interests that have been cultivated over decades. Azerbaijan has been Israel’s largest and most reliable supplier of crude oil for almost 20 years, and the security arrangements between the two countries include technological exchanges and arms. With its unique geographic positioning, Azerbaijan has also been a vital regional trade partner for Israel, opening avenues for Israeli commerce with other countries in Central Asia and the Caspian region.
The timing of SOCAR’s renewed commitment reflects more than just Baku’s desire to take part in international offshore gas projects. It also underscores the fact that the recent friction between Israel and Turkey does not shape Azerbaijan’s economic decisions nor diminish Azerbaijan-Israel cooperation. For more than a decade, Baku has successfully balanced its relationships with multiple regional powers, including Turkey, Russia, and Iran, while at the same time maintaining strategic depth in its relationship with Israel. This balancing act has become more challenging as Ankara’s hostility toward Jerusalem has escalated since the start of the war in Gaza, including boycotts of Israeli products, sanctions against trade with Israel, and even veiled threats of Turkish military intervention. However, Azerbaijan has stayed the course by respecting its alliance with Israel without forsaking its close cultural and political ties to Turkey. …SOURCE