In what turned out to be extraordinary timing, October 3 saw a Western coalition of France’s TotalEnergies and Italy’s Eni, plus Qatar Energy, apply for the second licencing round on oil and gas blocks 8 and 10 in Lebanese waters, while only four days later Palestinian political and military organisation Hamas launched coordinated multi-pronged attacks by land, sea, and air against Israel. Lebanon is a core member of the Iran-dominated Shia Crescent of Power, which both China and Russia have long seen as the foundation stone for their expansion of power across the Middle East as a whole, as analysed in depth in my new book on the new global oil market order.
Lebanon’s political and military organisation, Hezbollah, like its Palestinian counterpart Hamas, vows Israel’s destruction and praises Hamas for its “heroic operation” against Israel on October 7. Both paramilitary groups receive multi-layered support from Iran’s financial, intelligence, and military networks, and each of these support facilities is inextricably linked to China and Russia, as is also fully examined in my new book.
The potential for the Hamas attacks on Israel to suck in other Arab states into the conflict and for it to then become another proxy war—to add to that still raging in Ukraine—between the U.S. and Russia (and China) appears large. The last time that a major conflict between Israel and the Arab states occurred, the 1973 Oil Crisis erupted, which saw the benchmark WTI oil price shoot up around 267 percent—from about US$3 per barrel (pb) to around US$11 pb.
The West has long been looking to disrupt China and Russia’s increasing hold over the core Shia Crescent (comprising Lebanon, Jordan, Syria, Iraq, and Yemen)—as exercised through proxy Iran—and the expansion of its oil and gas activities in Lebanon can be regarded as part of that process. This is particularly the case now, as for many years the West has critically overlooked a key lever of power by which Russia and China have extended their own presence in the region—namely, the creeping roll-out of a massive pan-regional electricity power grid with Iran at its centre.
Within the last two weeks, the International Energy Agency (IEA) stressed that such power grids are “poised to emerge as the ‘new oil’ of the global energy system” and added that “For all countries, speeding up permitting, extending, and modernising electricity grids, addressing supply chain bottlenecks, and securely integrating variable renewables are critical.” Iran has long used Iraq—never under the scrutiny of U.S. sanctions as Iran has been—as a conduit for oil, gas, and electricity deals, as also detailed in my new book, as a means of expanding its levers of control over the Shia Crescent.
Such deals allow not just the installation of permanent infrastructure linking one country to another but also the on-site presence of permanent ‘technical and security’ personnel, including Iranians, Chinese, and Russians. In just the same way that Russia’s huge level of gas supplies to Europe gave it immense power across that continent up until changes to that arrangement were made after the 2022 invasion of Ukraine, Iran’s electricity and other power supplies give it enormous power over the Shia Crescent and increasingly the rest of the Middle East.
It was no coincidence that just over a month after Israel and the United Arab Emirates (UAE) normalised relations in August 2020 (and then Israel, Bahrain, and Morocco did the same), Iran’s own neo-client state, Iraq, signed new energy deals with core Shia Crescent countries, Jordan and Lebanon. In Jordan’s case, last October saw it sign a contract with Iraq to connect their electricity grids.
By extension, this provides a direct link between Jordan and Iran, as around the same time as Israel and the UAE announced their normalised relations deal in August 2020, Iraq signed a two-year deal with Iran for electricity imports, the longest such deal between the two countries. Shortly after that, Iran’s Energy Minister Reza Ardakanian stated that Iran’s and Iraq’s power grids had become fully synchronised to provide electricity to both countries by dint of the new Amarah-Karkheh 400-KV transmission line. He added at the time that Iranian and Iraqi dispatching centres were fully connected in Baghdad, the power grids were seamlessly interlinked, and Iran had signed a different three-year cooperation agreement with Iraq “to help the country’s power industry in different aspects”.