Israel has found a new regional ally in Cyprus. The basis for this relationship has been purely economic but could possibly grow deeper over time.

Israeli prime minister Benjamin Netanyahu visited Cyprus last week in order to discuss the furthering of relations between the two countries, which were mainly formed after the discovery of multibillion dollar gas finds in sea between Israel and Cyprus. The two countries focused primarily on exploiting hydrocarbon in today’s markets and other economic issues. However, the new contact between the two countries may raise concerns, particularly for Turkey, about their cooperation within the region.

Analysis

Despite warnings from Turkey, Cyprus began exploratory drilling for gas. This will color the Israel-Cyprus partnership, possibly fraying ties between Turkey and Israel further.

The main feature of the Israel-Cyprus relationship is the reaction of Turkey. The new interaction will probably displease Turkey. Relations between the two countries were strained by the 2010 flotilla debacle. Turkey will also dislike the further international involvement with the Cypriots, who are represented internationally by the Greek Cypriots. While Israel views Cyprus as the best and most direct way to transfer gas to Europe, Turkey will view this as a way to undermine Turkish Cypriot interests. However, Cyprus itself would be content with the development as it wishes to be a major player in regional energy.

Turkey is becoming a major player within the region. Its relationship with Israel has been decaying since 2009. Israel’s new economic partnership with Cyprus will not mend this fence. The relationship between Israel and Cyprus is currently only economic and the only signed agreement reached was regarding search and rescue missions. However, the relationship may deepen overtime. If so, the Cypriots should be careful to maintain their relationships with the Arab nations within the region and Israel should be cautious not to burn its bridges with Turkey.

Wikistrat Bottom Lines

Opportunities

• Israel and Cyprus share common political interests as well as a common interest in developing energy needs.
• Israel may be asked to protect Cyprus’ gas interests from Turkey’s threats.
• The dispute over rights to the gas may hinder and delay achievement of the full saturation of the gas potential.

Risks

• Turkey is a major force and rising economy in the region. Maintaining strong relations with it could be beneficial for all parties.
• Israel risks losing key support for its immediate regional objective of countering Iran’s march toward nuclearization.

Dependencies

• How much of this relationship is political and how much is economic or energy based?
• How will Turkey’s reaction be shaped by its desire to join the European Union?

Caitlin Barthold and Steven Aiello contributed to this analysis.