People walking along the beach as a navy vessel patrols the Mediterranean waters off Rosh Hanikra, known in Lebanon as Ras al-Naqura, on the Israeli side of the border between the two countries, on October 7, 2022. Israel and Lebanon have brokered a historic agreement to resolve a long-running maritime border dispute on Tuesday, following months of negotiations mediated by the United States.

Jalaa Marey | Afp | Getty Images

Israel and Lebanon reached a historic agreement to resolve a long-running maritime border dispute on Tuesday, following months of negotiations mediated by the United States.

The breakthrough between the two longtime adversaries — who are still technically at war — will enable both countries to develop the offshore gas fields in their waters and ramp up gas production, exports of which could be vital for Europe at a time when it is desperately seeking new sources.

While it has yet to be formally ratified, both parties have expressed their satisfaction with the terms of the deal.

“This is a historic achievement that will strengthen Israel’s security, inject billions into Israel’s economy, and ensure the stability of our northern border,” Israel’s Prime Minister Yair Lapid said in a statement.

He added that the “unprecedented deal” will strengthen Israel’s security and deliver more affordable energy to countries around the world.

His comments came after Lebanon received the final draft of the U.S.-brokered agreement with Israel.

Lebanese President Michel Aoun said that the terms of the latest draft satisfied Lebanon, and expressed hope in a post from his official Twitter account that the deal would be announced soon.

The Israeli president also thanked U.S. special envoy Amos Hochstein for his “hard work” in mediating the agreement.

A long history of conflict

Israel and Lebanon have been at war for decades since 1948, with both countries staking claim over a swathe of territory in the Mediterranean Sea, which contains part of the Karish gas field and Qana, a prospective gas field.

Negotiations pertaining to the Israeli-Lebanese border dispute over gas-rich waters off the countries’ Mediterranean coasts have been ongoing since October 2020.

The Karish gas field, which is being developed by Israel, has come under threat from Hezbollah, Lebanon’s powerful political and militant group backed by Iran.

In a surprise development, Hezbollah has agreed to the deal’s terms and considers the negotiations “over,” Reuters reported on Tuesday, citing two unnamed senior Lebanese officials.

While some steps remain for the maritime deal to be officially ratified, the fact alone that both countries can agree on something that they say will improve security and revenues for each is a victory, says former U.S. ambassador to Israel Dan Shapiro.

“The deal still must work through both political systems. Not easy,” Shapiro wrote on Twitter. “Up to Israeli AG, courts, and voters — internal matters for Israelis. For US interests, a resolution that allows gas for Lebanon and more gas for Israel to flow without risk of conflict is a win.”

It’s important to note that the agreement only pertains to a territorial dispute in a corner of the eastern Mediterranean sea, not land borders, which are still being contested.

Crucial gas exports

As for what the deal looks like, the U.S. proposal essentially divides the sea border in two, with the first 3 miles from the shore marked as Israel’s border, which has been treated as such for several years. Beyond that, the border will track along a line demarcated by Lebanon, called Line 23, meaning that each country’s exclusive economic zone (EEZ) will be clearly outlined.

Israel has discovered huge gas deposits in its EEZ that have contributed to its own supplies as well as its exports. That’s something that could be very useful for Europe as it grapples with its looming energy crisis after gas supplies from Russia were cut in response to sanctions over Moscow’s war in Ukraine. Israel’s Lapid said that his government is committed to increasing gas exports to Europe.

Lebanon has not managed to begin production yet, with progress on bidding and licensing moving slowly or not at all, due in part to the country’s endemic corruption. But if exploration results in a substantial gas discovery, the revenue could help improve Lebanon’s dire financial situation, which has left it with daily power outages and the inability to import fuel.

The deal also will allow Lebanon to begin exploring the Qana gas field, in its southern exploration block, via a consortium led by French energy giant Total. As the Qana field crosses into Israeli waters, the deal would allow Israel to get a portion of royalties if commercial quantities of gas are found.

Lebanese negotiators say Lebanon has held onto all of its maritime blocks.