This is the second part of a two-part series. Read part one here.
The Israel-Hamas confrontation is spreading to the wider Middle Eurasian region. This marks a turning point in the on-going reconfiguration of geopolitics in Middle Eurasia. Israel is fighting Iran-backed Hezbollah in Lebanon and Houthis in Yemen, the latter disrupting maritime trade through the Red Sea which carries nearly 30% of the world’s maritime container trade and 12% of its oil.
What will the geopoliticisation of the Gaza War mean? Beyond the shaky internal politics and desperation in these two communities, it speaks to new tensions in the global economy where relations among states and economic actors, including mega-corporations, are being reshaped.
Such rearrangements involve challenging the U.S.-led Western dominance of the post-war period, the rise of China, and Russia’s status as a resource-rich region opening to the global economy. It also means the sidelining of the international rules-based order underwritten by international organizations, among them the UN albeit dominated by the West. Israel was firmly positioned in that alliance. Thus, when it defied the UN sanctioned Oslo Accords or the peace process with Palestinians (in the territories Israel occupied in 1967), its behaviour could be overlooked or reprimanded as was the case under the Obama administration, when such behaviour interfered with the larger policy objectives of the U.S. in the Middle East.
Multiple actors are now in the vortex of the reconfiguration: Israel and Türkiye, once allies in the Western alliance, are growing independent of it. Keeping them company are China, Iraq and multinational oil and commercial interests.
The big game-changer for Israel is its turn eastward to secure a place for itself in the emerging configuration of powers in the global economy and politics. In the new arrangement, Israel’s alliance with the West is increasingly one among many multilateral engagements.
For instance, Israel is presently a major technology partner for China in the context of its Belt and Road Initiative. To see this, one only has to look at how Chinese perception of Israel has changed. Israeli studies are no longer classified as “enemy studies” but “area studies.” Closer to home, Israel has normalized its relations with the Gulf states and was in process of cementing them before the Gaza War. Saudi Arabia was to be a deterrent against Iran, while securing markets for its high-tech war industries in this security-obsessed region. Israel also has economic relations with Egypt and Jordan as an exporter of gas to these countries—which may explain the rather subdued response of both Cairo and Amman to Israel’s continued bombing of Gaza.
China, annoyed by regional squabbles, circumvented this regional line against, and isolation of, Iran by securing an agreement between Iran and Saudi Arabia to restore diplomatic relations. Yet, the Chinese move appears to have been outbid by a countermove on the part of the U.S. giving its support to a modern spice route or India-Middle East-Europe Economic Corridor (IMEC) from Mumbai to the Gulf, across the Saudi desert and Jordan, reaching the Israeli Port of Haifa. In January 2023, a consortium led by Adani Group bought the Port of Haifa, paying $1.2 billion, while China’s Shanghai International Port Group took responsibility for its operations. It should be noted that Biden had urged Netanyahu not to let the port be run by the Chinese. Recently, responding to Israel’s war in Gaza, China halted shipments to Haifa.
On the other hand, China abstained from taking any action against Houthi attacks in the Red Sea, despite disruptions of shipments. China continues to show its preference to remain above the fray in the present war despite the disruption of shipments of manufacturing goods from Shanghai to Rotterdam across the Red Sea by Houthi forces. Its response took the form of an anodyne statement made by its foreign ministry spokesperson at a press conference, urging all sides to play a “constructive and responsible role.”[1] Beijing simply does not want to get involved in the conflict between the Houthis, who control much of Yemen including the capital city of Sanaa, nor does it see itself in competition with the U.S.in securing the safety of the Red Sea trade. It is content to leave the policing to the U.S. and those of its allies who have chosen to take part in Operation Prosperity Guardian.
Regarding Middle Eastern trade corridors and oil and gas pipelines, Israel is in competition with Turkey. Ankara claims to be forming a hub connecting gas pipelines from Azerbaijan, Iran, and Caucuses to the Blue Stream Pipeline from Russia (and extending to the Balkans and the Adriatic Sea). The construction of Blue Stream led to a close collaboration between Russia and Türkiye in which the former sought to make up for lost sales to Europe. As a step toward energy independence, in 2023 Türkiye began exploring gas reserves off its Black Sea coast.
While Türkiye has close ties with Azerbaijan (it is an ally of Azerbaijan in itswar with Armenia), so does Israel, which has a major economic presence in the country. Alongside Kazakhstan and countries in West Africa, Azerbaijan provides Israel with oil. Israel achieved independence from foreign gas through discoveries in the 2000s of offshore natural gas reserves on its Mediterranean coast. Presently two major oil fields (Leviathan and Tamar) provide for the domestic market as well as export markets in its immediate neighbourhood. A projected East Mediterranean pipeline will further allow for the export of Israel’s reserves to southern Europe via Greece and Italy. The status of a third field, Gaza Marine, 20 miles off the Gaza coast is also being considered though Israel expresses concern that it may become a revenue source for Hamas. Confusion over who owns the field (between Royal Dutch Shell which acquired it in 2016 or the Palestinian Authority) has proven a further setback.
Oil companies (including Chevron) operating in Israel’s offshore natural gas fields are among the primary supporters of the Netanyahu governments over two decades, shaping the present regulatory environment. Oil interests are apprehensive about any changes which may be introduced by a successive Israeli government. This may be a factor which the Biden administration will have to take into account in its criticism of Netanyahu and the latter’s defiance. Decisions taken by major shipping companies, including Maersk, to travel round the horn of Africa in order to avoid Houthi attacks on Red Sea shipping have driven transport costs up.
Northern Iraq is another region of contention among different powers in the region. The U.S. has long wanted a Kurdish corridor encompassing northern Iraq where an autonomous Kurdish region was established following the U.S. invasion of Iraq, running down to the Mediterranean coast to northern Syria. Kurdish militia recruited and trained by American army officers were successful in ousting ISIS from the region. The militia includes the Kurdistan Workers’ Party (PKK), a Kurdish separatist group with a long and painful history of terrorist activity in Türkiye, which itself has a significant Kurdish population of 15 million, about 20% of its population.[2] Currently, the Turkish army is fighting the PKK, still under U.S. tutelage, in the northern Iraq-northern Syria corridor, despite Türkiye’s membership in NATO.
The Kurdish corridor includes rich oil fields. Türkiye has an interest in the region’s, a pipeline branching off from the Baku-Tbilsi-Ceyhan Pipeline Project.[3] The pipeline reaches from Azerbaijan via south-eastern Anatolia to Kirkuk (in northern Iraq) where Türkiye has good relations with the government of the Kurdish autonomous region. Israel also has a presence in northern Iraq where it has been reported to engage in real estate purchases since the establishment of the Kurdish autonomous region.[4]
Recently, Türkiye has been negotiating with the Iraqi government for an alternative to the India-Middle East-Europe Economic Corridor (IMEC), which will connect India to Europe via Haifa in Israel, bypassing Türkiye. A furious President Erdogan threatened to part ways with the EU saying, “there can be no corridor without Turkey.”[5] Instead, he has proposed—with the UAE and Qatar —for a transport corridor from Basra in Iraq.[6]
Notwithstanding, the revival of the old spice route as IMEC and an alliance between Saudi Arabia and Israel, will be a major game changer emerging from the war in Gaza. That appears to coincide with Saudi Prince Mohammed bin Salman’s vision of a Saudi Arabia-centered economic union of Middle Eurasian regions along the lines of the European Union, restoring linkages between the Indian Ocean and the Mediterranean.
The leaders of Türkiye and Israel were on the verge of a reconciliation, with visits scheduled to their respective countries last September. Now they are at loggerheads, especially in relation to the U.S. veto of a second ceasefire in support of Israel. In response, Erdogan reiterated his position on the necessity for developing countries to be included in the UNSC and to be given voting power, with the motto, “the world is bigger than five.” Using the rules-based international order as a reference, pointing to where those rules fall short but remaining within its bounds, allows Erdogan to stay above the fray in Middle Eurasian politics where differences are increasingly settled through resort to war.
Thus the reality of Middle Eurasia speaks to an environment of intense competition among the developing economies of the region (Israel, Türkiye, Iran, Russia) and their national security imperatives. This is also an environment of strong states equipped with high tech armies and with priorities for domestic economic and social development. These governments can and do take the initiative in their dealings with transnational powers/actors such as the U.S. and China as well as the mega-corporations. There are no fixed camps or stable alliances; interdependencies are formed especially on the basis of economic interests as, for instance, has been the case between Israel and its former enemies of Egypt and Jordan. A new era of ruthlessly pragmatic, extremely fluid relations of overlapping interests is now being established.
Huricihan Islamoglu is a former Visiting Fellow, Gateway House.
This essay was exclusively written for Gateway House: Indian Council on Global Relations. You can read more exclusive content here.
For permission to republish, please contact outreach@gatewayhouse.in.
Support our work here.
©Copyright 2024 Gateway House: Indian Council on Global Relations. All rights reserved. Any unauthorised copying or reproduction is strictly prohibited.
References
[1] “Spokesperson’s remarks,’ Embassy of the People’s Republic of China in the Gambia, 12 January 2024, http://gm.china-embassy.gov.cn/eng/wjbfyrth/202401/t20240112_11222952.htm
[2] Ömer Taşpınar and Gönül Tol, ‘Turkey and the Kurds: from Predicament to Opportunity,’ Brookings, 22 January 2014, https://www.brookings.edu/articles/turkey-and-the-kurds-from-predicament-to-opportunity/
[3] International Finance Corporation, ‘The Baku-Tbilisi-Ceyhan (BTC) Pipeline Project.’ September 2006, https://documents1.worldbank.org/curated/en/174011468016223078/pdf/382160ECA0BTC1LOE0201PUBLIC1.pdf
[4] It is not new territory for Israel: Jews had played an important role in Iraq for a century; newly independent Iraq’s first finance minister, Sassoon Ezkell, was a Jew[4]. That ended after the establishment of Israel and Palestine conflict, and in 1951 about 125,000 Iraqi Jews (over 75% of the population) were flown to Israel to escape persecution[4].
[5] Atilla Yeşilada, ‘Erdoğan angry at India-Middle East-Europe corridor — ‘no corridor without Turkey’, P.A. Turkey, 14 September, 2023, https://www.paturkey.com/news/erdogan-angry-at-india-middle-east-europe-corridor-no-corridor-without-turkey/2023/
[6] Alex Blair, ‘Turkey moves against Europe with trade corridor alternative to IPEC,’ Railway Technology, 20 September 2023, https://www.railway-technology.com/news/turkey-alternative-india-middle-east-trade-corridor-plan/?cf-view