Why Arab States Haven’t Broken With Israel

For many, the news that Jordanian fighter pilots came to the defense of Israel during Iran’s missile and drone attack last weekend must have come as a surprise. While Israel and Jordan have had diplomatic relations for 30 years, the peace between them has been cold even in the best of times and since the outbreak of the war in Gaza has gone into a deep freeze.

Yet Jordan was not the only Arab country contributing to Israel’s defense that night. The Royal Saudi Air Force also shot down Iranian projectiles flying in its airspace and Saudi Arabia and the United Arab Emirates reportedly provided critical intelligence before the attack.

There are any number of reasons why moderate Arab powers chose to play a role that night. One is that had the Iranian operation ended with significant loss of life or destruction, Israel would have struck back hard, raising the risk of a regional war. Indeed, an apparent Israeli retaliation early Friday against Iran appears to have been limited.

Another is that many Arab countries are no less anxious than Israel about Iran’s meddling—in Iraq, Syria, Lebanon, and Yemen and the instability it has created.

But no less important is that, for moderate Arab powers, Israel has become a key economic partner—indeed, for Jordan and Egypt, Israel is an economic lifeline. That goes a long way toward explaining why six months into the war in Gaza, Jordan, Saudi Arabia, and the UAE have taken almost no concrete steps against Israel. When Turkey finally did something, announcing on April 9 that it was banning a wide range of exports to Israel, no Arab country followed suit.

Of these countries, Jordan is the most reliant on Israel—not for the ordinary stuff of cross-border trade or for investment (both of which are negligible) but for essential water and energy.

Jordan is one of the world’s most water-scarce countries, with just 950 million cubic meters available annually to meet demand of about 1.4 billion cubic meters. Under the 1994 peace agreement, Jordan was entitled to buy 50 million cubic meters of water a year from Israel. That number has since doubled as Jordan’s population has grown, and Israel has developed so much desalination capacity that it has fresh water to spare. And the dependence is likely to grow: If a deal to swap more Israeli water for solar energy from Jordan goes through, Amman will begin importing an additional 200 million cubic meters.

The kingdom also lacks domestic energy resources and relies on imports of Israeli natural gas for electric power and its chemical industry. Gas accounts for more than 70 percent of electricity production in Jordan, and nearly all that comes from Israel’s Leviathan field. Egypt also needs Israeli gas because domestic reserves are depleting faster than new sources are being found, and its giant Zohr field is plagued by technical problems. When Israel briefly slashed exports after the outbreak of the war in Gaza, Egypt had to double rolling blackouts to two hours a day and import liquefied natural gas (LNG).

Egypt’s demand for Israeli gas goes beyond domestic needs. With its own supplies so tight, it can no longer export its own gas as LNG to Europe and instead re-exports Israeli gas. That has not only earned Egypt badly needed hard currency but ensures its role as the center of an emerging east Mediterranean gas hub that includes Israel and will likely include Cyprus one day.

The UAE’s economic interests in maintaining ties with Israel are about something entirely different: trade and investment, enhancing the Emirates’ role as a global logistics hub, leveraging Israel’s high-tech prowess to build its own tech industry, and partnering to solve the threat of climate change to the region. Since the 2020 Abraham Accords, the UAE has also emerged as a major buyer of Israeli arms. The export of Israeli weapons to countries that signed the Abraham Accords grew from nil that year to $2.9 billion in 2022.

In dollar terms, the Israel-UAE economic relationship remains comparatively small for both countries. But it represents something larger and more aspirational, namely part of an effort to reshape the Middle East—or at least as much of the Middle East as is possible—from a place chronically in the grip of war and extremist politics to one focused on economic development. The UAE, Qatar, and Bahrain have taken the route of prioritizing economics over all else, and Saudi Crown Prince Mohammed bin Salman is following their lead with his Vision 2030 plan to turn his kingdom from an oil economy into a center of technology, finance, tourism, and entertainment.

That said, the Saudis appear less convinced than the Emiratis that Israel has an important role to play in the new Middle East. But as the normalization talks that got underway last year demonstrated, Riyadh is willing to recognize Israel as part of a wider deal with the United States, something that would have been unimaginable a decade ago. While the war in Gaza has disrupted the talks and raised the price the Saudis are demanding from Israel on the Palestinian issue, Riyadh has signaled it is still willing to move forward.

The economic imperatives that have driven these relations face powerful headwinds. Even before the war in Gaza, public opinion even among Israel’s peace partners was overwhelmingly hostile to Israel. A year ago, just 15 percent of Jordanians said they would support business deals with Israel if they would help their country’s economy, according to a poll conducted by the Washington Institute for Near East Policy. Even though their country would struggle without Israeli gas and water, ordinary Jordanians frequently call to sever ties with Israel and rescind the import agreements. Under immense public pressure after the war in Gaza erupted, Jordan last November canceled a water-for-energy deal with Israel (although it has since sought quietly to resurrect it).

In Egypt and Saudi Arabia, about 38 percent of respondents in the poll a year ago accepted the idea of doing business with Israel. When the Washington Institute asked Saudis more recently whether they should be allowed to “have business or sports contacts with Israelis,” just 17 percent said yes, down from 42 percent in the summer of 2022.

Under the circumstances, it should be no surprise that the business Arab countries do with Israel is an elite affair confined to government-to-government deals and big state-affiliated enterprises. The ordinary ways of doing business, with executives attending industry conferences and exhibits or making sales calls, don’t exist. Tourism is a one-way affair—with Israelis visiting Arab countries but little reciprocation.

The UAE has been somewhat of an exception to this rule, certainly in the honeymoon period after the Abraham Accords were signed in 2020. Israeli executives and tourists flocked to the Gulf, and companies were signing investment and partnership deals. Abu Dhabi’s Mubadala Petroleum took a 22 percent stake in Israel’s Tamar gas field, and many other investment deals were under discussion. A Comprehensive Economic Partnership Agreement went into effect a year ago and in 2023, two-way trade reached $3 billion, up from $190 million in 2020. Even then, however, the people-to-people warmth exhibited on the Emirati side was tepid: The Washington Institute poll found only a 45 percent minority of Emiratis thought doing business with Israel was “acceptable.” Emiratis didn’t visit Israel, except for business.

Even though Emirati leaders say they remain committed to the economic and political partnership with Israel, there has been a perceptible chill since the onset of the war in Gaza. Last month, Abu Dhabi’s national oil company, ADNOC, put on hold a deal to buy, together with BP, a 50 percent stake in Israeli energy company NewMed. They cited the “external environment,” presumably the war, for the decision.

Fortunately for the future of these relationships, it appears that the war in Gaza is winding down. It is by no means certain that it won’t re-ignite with an assault on Rafah, as Israel has threatened, or that the low-intensity conflict between Israel and Hezbollah won’t spiral into a full-fledged war. But for now, as a testament to the prioritizing of realpolitik and economic interest by Arab leaders, these ties have stood the test.