After six years of strained relations between long-time friends-turned-foes Israel and Turkey, the two countries agreed this past week to normalize diplomatic relations. The once strategic allies have recommitted to supporting each other in international bodies and cooperating in international agreements, or at the very least not working against each other.  In a region ridden with security uncertainties, as evidenced by the dreadful terror attack at Istanbul's Ataturk airport, the resumption of a diplomatic alliance of this magnitude carries huge significance.

During the six-year fallout with Israel, Turkey’s relations with its other neighbors suffered tremendously as well. Russia, its main gas supplier, turned its back on Turkey in 2015 when Ankara downed a Russian jet. Meanwhile, as Syria descended ever further into civil war, and ISIS took hold, Turkey found itself at the forefront of a Syria-inspired proxy war against another of its major gas suppliers, Iran, which in turn used its influence over Iraq to damage Turkish interests.

In the wake of the overthrow of the Muslim Brotherhood, an Islamist organization supported by President Erdoğan, Cairo also closed the door on Ankara. Coupled with both the long-standing Turkey-Cyprus/Greece dispute(s) and increased economic turmoil in Greece, the country was stripped of regional friends and commercial partners.

Simultaneously, Israel’s allegiances were moving in much the opposite direction. Prime Minister Netanyahu found a rare neighborhood friend in a dominant Egyptian President al-Sisi, increased Israel’s collaboration with the Kremlin and saw relations with both Cyprus and Greece take off. With Syria’s civil war to its north, the encroachment of ISIS in the region, the looming threat of a nuclear Iran and a void left by a disengaging Unites States, Jerusalem found shared interests with moderate Sunni Arab states in the region.

A shift in the region’s balance of power

Given their conflicting interests in recent years, not to mention some fairly vicious rhetoric, it is worth considering just how much both sides are risking to reach this détente and whether it may therefore carry wider regional implications. In short, can we expect more than diplomatic pleasantries, a potential upshot in tourism and increased trade?

Ankara’s decision to deal with the Jewish State signals a recalculation of its bearing towards a new regional geopolitical reality with Israel at its core.

For President Erdoğan, the rapprochement deal with Israel is the first major shift in foreign policy since the resignation of Prime Minister Davutoğlu and looks likely to be followed by reconciliation with Russia and Egypt. Turkey may take a larger role in addressing humanitarian issues in Gaza also, in an additional seeming indication of Erdoğan’s efforts to patch up old wounds. With this being said, it’s not yet clear whether Turkey can regain its previous status as a mediator of conflicts in the Middle East.

Jerusalem has recognized a shift in the regional balance of power with an increase in Russian involvement and a decrease in the influence of Europe and the US in the region.

For Prime Minister Netanyahu, this agreement is a critical juncture in Israel’s regional relations. The deal comes at a time when Israel seeks to build political alliances with moderate Arab neighbors, principally as both a diplomatic shield to aid Israel’s standing in Western capitals and multilateral bodies, as well as a means to counter the growing influence of Iran in the region. As commentators in Israel have been keen to point out, the deal between Ankara and Jerusalem may catalyze wider regional cooperation on what is perceived by Turkey, Israel and moderate Sunni Arab states as the biggest regional challenge, Iran.

And what about the gas?

For Israel, a hellish combination – regulatory delays, regional instability and a global LNG slowdown – has raised questions about the country’s ability to find a viable plan to extract its massive gas finds. With Ankara back in play, Israel is eyeing up not just Turkey but Egypt, Jordan, Greece and Cyprus as potential export markets for the country’s large and hard-to-shift natural gas reserves.

Turkey, with a shortage of hydrocarbon resources of its own, is dependent on imports - mostly natural gas - for its electricity generation. In 2015, Turkey imported 54.7% of its natural gas requirements from Russia, 18.1% from Iran and 12.4% from Azerbaijan. Turkey urgently needs new suppliers for diversification, which is a tougher challenge considering its demand projections – set to rise by nearly 15-20 bcm in the coming decade.

To the west, Greece is almost entirely dependent on imports for its energy requirements, also relying on Russia for the majority of its gas. While Cyprus has discovered natural gas reserves, it faces real hurdles to actually proceed in converting its finds into a commercial opportunity. Egypt too is staring at a huge abundance of underdeveloped gas reserves, which will likely remain untapped – much to the displeasure of energy-hungry domestic consumers – until a viable export strategy is put in place.

The path forward?

Cooperation on joint exports between Israel and Cyprus have been seen as the most economically viable way to export gas. While Cyprus has been advocating for an onshore LNG facility, Israeli policy-makers are thought to be more inclined towards a less costly pipeline. Cyprus has been open to this, with the provision that its route bypasses Turkey for geopolitical reasons.

A normalization of relations between Israel and Turkey changes the picture and could bring about a regional natural gas plan. With Turkey’s existing energy corridor status through Ceyhan port in the Mediterranean and the ongoing construction of westward TANAP-TAP pipelines, this would provide opportunity for Egypt, Cyprus and Israel to reach European customers, in addition to the large Turkish market. Russian objections will need to be managed, but normalized ties between Israel and Turkey could not be timelier in unlocking a path forward.

Looking forward, while the agreement between the former strategic allies was largely driven by mutual security concerns, the greatest potential for cooperation may well be driven from deep below the waters of the Eastern Mediterranean, unleashing new geopolitical realities.

Lana Osher

Lana Osher, an associate director in APCO’s Tel Aviv office, and specializes in providing strategic communications, reputation management, crisis communications and government affairs support to several of APCO’s multinational clients. Read More

Tolga Bag
Tolga Bag

Tolga Bağ is an associate consultant in APCO Worldwide’s Istanbul office, where specializes in providing government relations and strategic communications consulting for multi-national clients. Read More