Ongoing war proves Israel must establish energy independence - opinion

• Published date: 24 March 2024
• Author: ROI PERETZ
• Publication title: Jerusalem Post, The: Web Edition Articles (Israel)

While we continue to fight for the return of the abductees and the restoration of stability in the region, we must also deal with the economic challenges that the war created and formulate solutions with an emphasis on energy and economic independence for the country the day after

The economic price tag of the war is expected to amount to approximately NIS 150-200 billion, which reflects a decrease of approximately 10% of Israel's GNP and resets the annual growth targets, according to the Institute for National Security Studies (INSS).

Beyond the direct economics of the war itself, including manpower and armaments, Israel is investing and will continue to invest huge sums in aid to the evacuated residents, in support of business and industry and during the overall reconstruction of the conflict areas, which will require a high financial commitment which is expected to last for many years. Already now, the country is forced to deal with increasing economic pressures on the geopolitical level, which are manifesting as of now on two main fronts: Turkey and Yemen.

As soon as the war broke out, Turkey began to act against Israel in the political arena, but recently it also began to take economic measures. A few weeks ago, Turkey removed Israel from its list of export destination countries, meaning it will stop subsidizing and supporting businesses operating with the State of Israel.

Along with many Israeli industries dependent on imports from Turkey, including the construction industry which depends on the import of aggregates and raw materials, the energy industry may also be adversely affected by the decision.

Recently, Turkey decided to freeze a plan to search for energy in the Mediterranean Sea and export gas to Europe, which was supposed to be carried out in cooperation with Israel. Moreover, Israel has a certain dependence on Turkey in the field of oil: most of the oil imported to Israel comes from Asian countries and the Caucasus through the BTC oil pipeline, which flows through a terminal in southeastern Turkey.

In addition, the activity of the Houthis in Yemen creates another development front in creating economic pressure on Israel and the countries that support it. Since the start of the campaign, Houthi forces have been imposing a de facto naval blockade, preventing the passage of ships through the Red Sea.

Attacks that break out on cargo ships in the area are ongoing, forcing them to take much longer routes than planned, so there are many economic...