Despite loud public condemnations from Egypt and Jordan regarding Israel’s ongoing war with Hamas, the financial figures tell an entirely different story—one that reveals a deepening economic interdependence rather than a severing of ties. While the leaders of these neighboring Arab nations have, at times, issued fiery rhetoric and even threatened to annul peace accords, their actions in the economic sphere prove otherwise. Israel’s natural gas exports to Egypt and Jordan surged by a remarkable 13.4% in 2024, marking a new milestone in regional trade.

Strategic Importance of Natural Gas Exports

Israel’s Energy Minister Eli Cohen hailed this development as a testament to the strategic role of Israel’s energy industry in securing regional stability. “The significant increase in natural gas exports to Egypt and Jordan shows that the natural gas industry constitutes an important strategic asset for Israel, contributing to both economic prosperity and geopolitical security,” Cohen declared. He further underscored Israel’s commitment to maximizing its natural gas potential, forecasting an era of expanded exports, intensified competition, and greater investment in energy infrastructure.

Record-Breaking Revenues: A Financial Windfall for Israel

In 2024, Israel shattered revenue records in its energy sector. Royalties from natural gas and minerals soared to NIS 2.37 billion, an 8.2% increase from 2023. Since the inception of its natural gas industry, Israel has accrued nearly NIS 30 billion in state revenue, with NIS 14.9 billion coming from royalties alone. These funds have been crucial in strengthening the national economy, with a portion funneled into the country’s sovereign wealth fund, the “Citizens of Israel Fund,” managed by the Bank of Israel.

Israel’s taxation structure ensures that the country maximizes its gains from this lucrative sector. Gas partnerships are required to pay multiple taxes, including:

• 12.5% royalties under the Petroleum Law from the onset of production.
• 23% corporate tax on profits, administered by the Israel Tax Authority.
• The “Sheshinski tax,” a levy on super-profits from natural resources, ranging from 20% to 46.8%, after investors have earned 150% of their initial investment.

Booming Production and Exports: Key Statistics from 2024

Israel’s Ministry of Energy and Infrastructure’s latest report details three major growth trends:

• A 13.4% rise in natural gas exports to Egypt and Jordan.
• An 8.3% increase in total natural gas production compared to 2023.
• A 10.88% surge in royalties collected from natural gas and oil compared to the previous year.

Powerhouses of Production: Tamar, Leviathan, and Karish Fields

The lion’s share of Israel’s natural gas revenue stems from the Leviathan and Tamar reservoirs, with additional contributions from the Karish oil field:

• Leviathan field: Produced 11.33 BCM of natural gas, generating NIS 1.022 billion in royalties, an increase of 2.7% from 2023.
• Tamar field: Production reached 10.09 BCM, resulting in NIS 779 million in royalties, a 12% increase from the previous year.
• Karish field: Contributed NIS 507 million in total revenues, with 67.7% originating from the local gas economy and the remainder from oil exports.

Setback in the Mineral Sector: Declining Phosphate Prices

While natural gas production soared, Israel’s mineral industry experienced a slight decline in 2024 due to falling phosphate prices. Revenue from mineral royalties totaled NIS 41.2 million, compared to NIS 44.2 million in 2023. The downturn was attributed to decreased phosphate values, leading to a drop in raw ore revenue. However, the Ministry of Energy and Infrastructure countered this with new mining licenses, collecting NIS 16 million from exploration permits and an additional NIS 5.1 million in various licensing fees.

Eli Cohen’s Vision: A Prosperous Future for Israeli Energy

“The state’s income from royalties on natural resources, which now exceeds NIS 2.37 billion annually, is fantastic news for the Israeli economy and directly benefits Israeli citizens,” said Energy Minister Cohen. He projected that Israel’s total revenue from natural gas, including royalties, corporate taxes, and the Sheshinski levy, will reach approximately NIS 5 billion this year, with expectations of hitting NIS 10 billion annually within a few years.

Conclusion: Economic Ties Trump Diplomatic Rhetoric

While the streets of Amman and Cairo may chant against Israel, their governments continue to deepen economic ties through lucrative natural gas deals. The undeniable growth in energy exports, coupled with Israel’s strategic push for further expansion, showcases a Middle East where economic pragmatism often overrides political posturing. As natural gas becomes an even greater pillar of regional interdependence, Israel’s economic clout continues to rise—cementing its role as a powerhouse in the global energy market.