The conflict between Israel and Hamas could contaminate the area and create a storm in the global energy market, which includes both oil and liquefied natural gas (LNG).

History shows us that any tension in the region leads to higher oil prices. Two weeks after the start of the conflict, the market reacted, the price of oil increased by an average of 4.2%.

Israel is not a player in this market, but the region has large oil and gas reserves and important energy routes.

First, here are five important OPEC countries:

Iraq (since September 1960)

Iran (since September 1960)

Kuwait (since September 1960)

Saudi Arabia (since September 1960)

United Arab Emirates (since November 1967)

Qatar was also a member from December 1961 to January 2019.

These countries export through the Strait of Urmuz. In terms of importance, the strait accounts for approximately 20% of daily oil and by-product consumption (20.4 million barrels per day), to which we add 20% of global LNG exports, mainly from Qatar, the largest producer. and exporter in the world, and in 2023 – the most important exporter of LNG in the European Union. (Just the other day, Italy and Qatar signed a 27-year agreement.)

Much closer are the Suez Canal and the Suez-Mediterranean Pipeline (SUMED), declared critical transit points. About 1.75 million barrels of oil and refined products pass through the Suez Canal per day, and 2.5 million barrels per day through the SUMED pipeline. In addition, about 25% of global LNG production passes through the Suez Canal, which goes mainly to Europe. It should be noted that from 2024, Egypt will increase the cost of transportation through the Suez Canal by up to 15%, which will lead to higher prices for oil and LNG for Europe. A few years ago, Israel was not a player in the natural gas market. Only in the past three years has it begun to develop several deepwater gas reserves off its coast in the Mediterranean.

In 2022, Israel produced 21.9 billion cubic meters of gas, 11.4 million cubic meters from the Leviathan field and 10.2 million cubic meters from the Tanar field. Of these, 12.7 million m3 were consumed domestically, and the rest were exported to Egypt (5.8 million m3) and Jordan (3.4 million m3). In 2023, another pipeline is expected to be put into operation, which will be fed from the Kadishsi field, which will increase production by 6.5 million cubic meters. (source: bruegel.org)

We will remind you that this year Israel signed a contract for the export of LNG with the European Union. The route passes through the EMG branch of the Arab Gas Pipeline to Egypt, where it is liquefied in Port Said and reloaded into special LNG tankers that reach the European coast. – read more and comment on Contributors.ro