When Israel’s prime minister approved a $35-billion deal to supply natural gas to Egypt last month, Energy Minister Eli Cohen said the benefits of increased gas trade with its neighbour went far beyond money.

“The approval of this gas agreement is a historic moment for the State of Israel, both in the security-diplomatic sphere and the economic sphere,” Cohen said on December 17.

In contrast, Egyptian officials – sensitive to the optics at home due to widespread anger over Israel’s military offensive in Gaza – played down the political significance of the deal, saying it was “purely commercial”. 

The deal’s final approval, which had been delayed by several months, reflects Israel’s commitment to ramp up offshore gas extraction as a way to assert its regional dominance and shore up economic ties amid international criticism over the war in Gaza, analysts say.

While Israel has a globally renowned clean-tech sector, the push on fossil gas underscores how climate action is low on the country’s priority list.

Climate action takes a backseat

Shortly before the gas export deal was finalised, at COP30 in Brazil, Israel declined to add its voice to calls by more than 80 countries for a roadmap to transition away from fossil fuels. And before that, in October, the Energy Ministry said the country would fail to meet a 2025 target for renewables to make up 20% of its energy mix.

Israel’s latest climate plan sets a target to reduce greenhouse gas emissions 27% by 2030 from 2015 levels, and it has not yet presented an updated nationally determined contribution (NDC) due in 2025.

The government of Prime Minister Benjamin Netanyahu is also preparing to launch a new offshore gas exploration campaign within weeks, following the signing in October of a ceasefire agreement to end two years of war between Israel and the Hamas militant group in Gaza.

Beyond the Middle East, Israel’s gas push also highlights another challenge for the global clean energy transition as fossil fuels play a key role in political instability and conflict, from Ukraine to Venezuela.

Fuelling the economy

Fossil gas accounts for about 70% of Israel’s energy mix, followed by renewables – mainly solar – and coal.

Last year, the 27 billion cubic metres (bcm) of gas extracted off Israel’s coast were split almost evenly between domestic consumption and exports to Jordan and Egypt, the only two buyers of Israeli gas, both of which are vocal allies of the Palestinians.

Despite their condemnation of the war, neither country sought to halt the gas trade during Israel’s military campaign in Gaza, which killed about 71,000 Palestinians and left most of the coastal enclave in ruins.

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Israeli gas exports to both countries increased 13% during 2024, maintaining an upward trend in shipments of the fossil fuel since 2018.

“Both Egypt and Jordan may signal solidarity with Palestinians in public, but their infrastructures tell a different story,” wrote Rafeef Ziadah, a UK-based scholar and human rights activist.

Israel’s gas exports to Egypt were halted for several weeks in 2023 when the war began, and again in 2025 when Israel launched a brief air war against nuclear sites in Iran – disrupting an increasingly important supply of energy to Egypt, which has faced power shortages in recent years as its own gas production dwindled.

Egypt is heavily dependent on fossil gas for energy generation, with renewables, mainly hydropower, making up only about 11% of the power mix, according to data from the Ember think-tank.

For Israel, gas is a win-win trade

Gas production has also been an important source of revenue for Israel, and income has been growing in recent years, including during the war in Gaza. Israel’s gas revenues grew in 2024 to 2.3 billion shekels ($720 million) from 2.1 billion a year earlier, official data shows.

Some of the gas proceeds feed Israel’s sovereign wealth fund, but much of the income from gas – mainly royalties and corporate tax – goes directly to state coffers, helping to fund Israel’s occupation of the West Bank and the Gaza war, both of which are opposed by Jordan and Egypt.

Laury Haytayan, a Middle East and North Africa energy expert, described the gas ties between Israel and Egypt as a “kind of co-dependence”.

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While that might be politically uncomfortable, Egypt’s energy crisis means it cannot afford to be choosy, analysts say.

“Israel remains an important pillar of the energy supply in neighbouring countries, contrary voices notwithstanding,” Israel’s Petroleum Commissioner Chen Bar Yoseph told Climate Home News.

The recent finalisation of the Egypt export deal also drew praise from Israel’s main international ally, the United States, with the State Department calling it “a major win for American business and regional cooperation”.

US oil major Chevron, which holds a 40% stake in Israel’s offshore Leviathan field and operates the field, plans to expand it as a result of the agreement.

“More gas will be found”

When Netanyahu announced his approval of the deal, he said it would encourage other companies to explore for more gas resources off the Israeli coast.

“More gas will be found,” Netanyahu said, two weeks after the Energy Ministry said it was close to launching a new tender for gas exploration in offshore blocks. 

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The deal signed between Egyptian firm Blue Ocean Energy and Chevron, along with its partners in Leviathan, will see 130 billion cubic metres of Israeli gas pumped to Egypt over the next 15 years. Israeli media reports linked the planned offshore gas expansion to concerns over limited gas reserves which resurfaced in the wake of the export agreement.

Israeli officials hope the ceasefire in Gaza, coupled with the finalisation of the Egypt deal, will boost international interest in the bidding, which could take place early this year.

Pro-Palestinian groups denounce exploration

Climate and environmental campaign groups, meanwhile, have repeatedly demanded that Israeli gas exploration be frozen, citing the potential consequences for planet-heating emissions and marine ecosystems.

Palestinian human rights NGOs have warned that the hunt for fossil gas could also expand Israel’s illegal exploitation of Palestinian natural resources since several maritime zones earmarked by Israel for gas exploration overlap waters claimed by Palestinians in a 2019 submission to the UN Convention on the Law of the Sea (UNCLOS).

“Israel cannot operate there unilaterally. It is not an Israeli territorial or economic zone with authority to operate there,” said Suhad Bishara, legal director at Adalah, an Israel-based organisation focused on promoting Palestinian rights.

“Any company that agrees, or enters, or is associated with drilling in this area is complicit in breaching international law,” Bishara said.

Whether or not more exploration licences are granted, some experts question how much more undiscovered oil and gas lies beneath the seabed off Israel.

Geologist Yossi Langotsky, considered the father of Israeli offshore gas, has long maintained that the Leviathan and Tamar fields – which are not in areas claimed by the Palestinians – are the only large gas reservoirs along Israel’s coast.

For as long as the two fields are producing enough, Israel will likely find a willing buyer in energy-hungry Egypt – whatever the geopolitical backdrop.

“Even when regional leaders rail against occupation or genocide, the gas keeps flowing,” said Ziadah, the UK-based rights activist.

The post Israel’s fossil gas power play pushes climate action to the sidelines appeared first on Climate Home News.

Israel’s fossil gas power play pushes climate action to the sidelines