Israel-Azerbaijan Energy Deal Strengthens Strategic Partnership

By Ariel Cohen, alumnus of The Fletcher School, Senior Fellow at Atlantic Council

In the aftermath of the October 7 Hamas mega-terrorist attack on Israel and the ensuing Gaza war, which jeopardizes the Abraham Accords, a groundbreaking energy deal between Azerbaijan, a secular Shia-Muslim majority nation, and Israel just took place. Azerbaijan’s state-owned SOCAR company will explore the area in the Mediterranean north of the giant Leviathan field.

Several key players, including Ratio Energies and New Med of Israel, Italy’s Eni, BP, and notably Azerbaijan’s SOCAR, have secured licenses to explore and develop new natural gas reserves in the Eastern Mediterranean, focusing on the waters near the Leviathan field—one of the world’s largest deep-sea natural gas deposits. Far from isolating Israel and undermining its newfound Eastern Mediterranean energy role as many feared, the war may accelerate its expansion.

Hamas’ ISIS-style terrorism was aimed to put the Islamist organization in a leadership position in the Palestinian territories against the Fatah-dominated Palestinian Authority, strengthen its sponsor, the Iranian theocratic dictatorship, and fan antisemitism in the Muslim world. Hamas is dead set to derail diplomatic rapprochement between Israel and its Arab neighbors and create enough instability in the Middle East’s energy sector to cause oil prices to rise – and to benefit its supporters Russia and Iran.

So far, Hamas and their Iranian patrons and Russian enablers have failed in their calculations. Hezbollah, the Iranian-created and -supported massive Lebanese Shia terrorist organization refrained from a massive missile attack against Israel, albeit it exchanges fire across the Israel-Lebanon border, and so far, has not harassed the Israeli Leviathan off-shore gas field.

Despite Azerbaijan’s Shia-Muslim majority and close ties to Ankara, Baku and Jerusalem have maintained a strong friendship since the collapse of the Soviet Union. Azerbaijan, characterized by its secular nature and home to an ancient Jewish community, opened an embassy in Tel Aviv in 2022, strengthening diplomatic ties. This move signifies the deepening connection between the two nations, driven by shared strategic, energy, and trade and investment interests that transcend religious differences.

Azerbaijan and Israel, both at odds with Iran, have found common ground in their rivalry with the Islamic Republic. Azerbaijan’s hostility towards Iran stems from the latter’s rejection of its secular nature, hostility towards its Turkic identity, suppression of the large Azeri minority in the Islamic Republic, and support of Armenia during the Nagorno-Karabakh conflict, which started in 1988. Presently, Azerbaijan supplies approximately 40% of Israel’s oil demand, a critical lifeline powering cars and airplanes. Notably, an Azeri oil tanker initially en route to the Israeli port of Ashkelon was rerouted to Eilat due to Hamas rocket fire. Continued energy deliveries underscore the strategic importance of this partnership.

The symbiotic relationship extends beyond energy cooperation to military-industrial collaboration. Israel has been a major arms supplier to Azerbaijan, contributing to its military campaigns in Nagorno-Karabakh. Israel supplied 70% of Azerbaijan’s weapons until 2019, when Turkey became the dominant armorer. Weapons ranging from high-tech systems like the Barak 8 missile defense to unmanned aerial vehicles such as Hermes and Orbiter, as well as ballistic missiles and loitering munitions, have strengthened Azerbaijan’s military capabilities. Azerbaijan even purportedly might serve as a base for Israeli intelligence operations in Iran.

The reciprocity extends further. Recently Azercosmos, Azerbaijan’s national space agency, purchased from Israel Aerospace Industries. Over 100 Israeli firms have established operations in Azerbaijan, contributing expertise to sectors such as agriculture, education, and medicine. Plans for Azerbaijan to export wheat to Israel by 2025 and the annual exchange of Azeri students further underscore the multifaceted nature of this strategic partnership.

The recent granting of a gas exploration license to SOCAR, Azerbaijan’s state oil company, is not merely a business transaction. It symbolizes a sustained and growing cooperation between Israel and Azerbaijan. This partnership is not only rooted in their shared threat from Iran but also extends to addressing each other’s adversaries—Hamas for Israel and Armenia for Azerbaijan. It also represents a critical rebuke to the sectarian extremists who posit that Muslims’ friendship with the Jewish state is impossible. While both nations continue to navigate regional conflicts and shared concerns, the trajectory points toward an even more profound collaboration between Israel and Azerbaijan, reaffirming their strategic alignment and mutual interests.

(This post is republished from Forbes.)