[News] How Israel is trying to beat the ‘Axis of Resistance’ by dominating the regional supply chain

[Anti-Imperialist News]

mondoweiss.net
<https://mondoweiss.net/2024/10/how-israel-is-trying-to-beat-the-axis-of-resistance-by-dominating-the-regional-supply-chain/?ml_recipient=136618588037449668&ml_link=136618582186394748&utm_source=newsletter&utm_medium=email&utm_term=2024-10-30&utm_campaign=Daily+Headlines+RSS+Automation>
How Israel is trying to beat the ‘Axis of Resistance’ by dominating the
regional supply chain By Ahmed Alqarout
<https://mondoweiss.net/author/ahmed-alqarout/> October 29, 2024
------------------------------

In a recent public address on October 4, Iran’s Supreme Leader Ayatollah
Ali Khamenei highlighted for the first time what he described as U.S. and
Israeli plans to control the region’s natural resources. He stated that
Israel’s current war campaign aims to position Israel as a hub for
exporting energy to Europe and importing technology to ensure its survival.
Khamenei called for resistance against the so-called India-Middle
East-Europe Economic Corridor (IMEC), a proposed land bridge connecting
India, Saudi, the UAE, Jordan, Israel, and Europe.

Days after his call, the Iranian parliament discussed introducing a bill
for a defensive alliance with the countries belonging to the “Axis of
Resistance.” Khamenei further elaborated on this vision on October 27,
calling for the establishment of “a global political and economic alliance,
and if necessary a military one” to confront Israel and stop its ongoing
crimes against the peoples of the region. This signals a clash of markets
might be the next phase of the war. At the heart of this clash is the
conflict over dominance in regional and global supply chains.

Supply chain disruptions have become a recurring global issue since the
outbreak of COVID-19, which caused countries to implement stringent
controls over imports and exports. The concept of supply chain security
swiftly became a central concern. The U.S. government adopted protectionist
measures, particularly regarding vaccine exports, while Russia
<https://time.com/5827804/russia-wheat-food-shortage/> and India
<https://www.theguardian.com/world/2022/may/14/india-bans-all-wheat-exports-food-security-risk>
imposed restrictions on food imports and exports, and China limited the
export of protective equipment and medicines. This experience highlighted
the importance of supply chain security for many nations.

The emphasis on supply chain security was not solely driven by
pandemic-related concerns but also by the escalating geopolitical
competition between the West and the BRICS nations. The U.S., in
particular, began wielding supply chains as a strategic tool against China
and Russia, especially in light of the semiconductor and Ukraine wars. The
U.S. imposed restrictions on Chinese companies’ access to critical
semiconductors produced using American technology, affecting major firms
like Huawei and ZTE. In the aftermath of the Ukraine war, the U.S. led a
Western coalition in imposing broad sanctions on Russia’s supply chains,
attempting to isolate the country from the global economy. In response,
Russia and China retaliated by limiting critical exports of rare earth
minerals and uranium to the West.

The global supply chain conflict extended to the MENA region. In the
context of its war on Gaza in 2023, Israel sought to exploit its
integration within global and regional supply chains to achieve its
military objectives. By weaponizing its position within these supply
networks, Israel aimed to further its strategic goals.
*Embedding Israel in the regional supply chain*

Before Israel could weaponize its regional supply chain, it first needed to
establish it. While Israel had trade links with other MENA countries for
decades, these connections were limited and often conducted in secrecy.
However, the signing of the Abraham Accords in 2020, which included Israel,
the UAE, Bahrain, and later Sudan and Morocco, allowed Israel to more
deeply embed itself in the regional supply chain. Additionally, Israel’s
recent gas discoveries over the past decade became a tool to draw countries
into closer economic relationships, building on earlier agreements like the
Camp David Accords (1978) with Egypt and the Wadi Araba Treaty (1994) with
Jordan, as well as the region’s growing energy needs due to population
growth.

Israel aimed to further entrench itself in the regional economy by signing
numerous free trade agreements and strengthening trade ties with countries
that had normalized relations with it. Israel signed its first free trade
agreement in the region post-normalization with the UAE. In May 2022, both
countries agreed on the UAE-Israel Comprehensive Economic Partnership
Agreement
<https://www.moec.gov.ae/en/-/uae-and-israel-sign-comprehensive-economic-partnership-agreement-to-advance-bilateral-trade-beyond-usd-10-billion-in-5-years>.
This agreement, the UAE’s second bilateral trade deal following its
agreement with India in February 2022, aims to boost trade by reducing or
eliminating tariffs, enhancing market access for exporters, attracting new
investment, and creating opportunities in key industries such as energy,
environment, and digital trade. It is expected to increase bilateral trade
beyond $10 billion.

This agreement has facilitated Israeli companies exporting cyber security
services to the UAE, contributing to Israel’s economy, even amid global
calls for boycotts following allegations of genocide. The UAE became a
vital economic lever for Israel to maintain strained global trade relations
and establish links with the Indian economy. For instance, Airobotics
<https://www.ondas.com/post/ondas-holdings-airobotics-receives-2-6-million-order-for-optimus-drone-systems-in-dubai-uae>,
an Israeli company, has offices in Dubai, from which it exports Israeli
services and drones worldwide. Shipping and energy projects
<https://www.reuters.com/article/world/middle-east/israeli-pipeline-company-signs-deal-to-bring-uae-oil-to-europe-idUSKBN275151/>
between the two countries are also being discussed and implemented.

Following the normalization of relations with Bahrain
<https://www.reuters.com/world/middle-east/israel-bahrain-hope-seal-free-trade-deal-by-end-year-2022-10-31/>
in September 2020, Israel sought a free trade agreement with the country.
The agreement is expected to allow Israel to leverage Bahrain’s strategic
position in the global shipping, finance, and energy sectors. Already, Cox
Logistics, which manages the land bridge linking India, the Gulf, and
Israel via Bahrain, has signed an MoU with Israeli firm Trucknet to use a
cloud-based platform to facilitate exports to Israel via the U.S. military
supply chain in the MENA region. Cox Logistics
<https://www.defsecme.com/business/bahrain-based-cox-logistics-signs-agreement-with-israels-trucknet>
provides logistics services to U.S. military vehicles across the Middle
East. With Saudi Arabia, the UAE, and the U.S. as Bahrain’s key trading
partners, this highlights Israel’s integration into regional trade links
under the U.S. security umbrella. While the volume of trade through this
route is not large, it has bolstered Israel’s resilience in the face of
war, especially after Yemen imposed a blockade on the Red Sea,
significantly reducing maritime imports and causing inflation.

Similarly, after joining the Abraham Accords, Israel accelerated its
integration into the Moroccan market, using Morocco as a stepping stone to
gain greater access to Africa. Morocco’s free trade agreements
<https://www.afdb.org/fileadmin/uploads/afdb/Documents/Publications/Analyse_de_la_politique_commerciale_du_Maroc_Volume_2_Anglais.pdf>
with African nations, such as Tunisia, helped make Morocco a hub for
Israeli exports
<https://www.hespress.com/%D8%AA%D8%B7%D8%A8%D9%8A%D8%B9-%D9%8A%D9%82%D9%88%D8%AF-%D8%A7%D9%84%D8%AA%D8%AC%D8%A7%D8%B1%D8%A9-%D8%A8%D9%8A%D9%86-%D8%A7%D9%84%D9%85%D8%BA%D8%B1%D8%A8-%D9%88%D8%A5%D8%B3%D8%B1%D8%A7%D8%A6%D9%8A-1212148.html>
to the continent. In February 2022, Morocco and Israel signed a trade
<https://research.hktdc.com/en/article/OTk4MDU1NzA5> and investment
cooperation agreement that created a framework for bilateral economic and
trade relations. The deal targeted high-potential sectors, such as
automotive, agribusiness, Industry 4.0, aerospace, renewable energy, and
water technologies. It also established qualified industrial zones in
Morocco that would allow direct access to the U.S. market, thanks to a
tripartite agreement between Morocco, Israel, and the United States.

As a result, Israel signed an offshore natural gas
<https://www.reuters.com/markets/deals/israels-newmed-signs-deal-morocco-natgas-exploration-2022-12-06/>
exploration and production deal with Morocco in December 2022. In May 2023,
Israel and Morocco signed three additional agreements
<https://worldisraelnews.com/israel-signs-transportation-deals-with-morocco-as-ties-deepen/>,
including a maritime agreement to encourage direct trade links and an
agreement to develop drones and self-driving cars. Military and security
cooperation has also expanded. After being the first country to sign
the U.S.-led
Artemis Accords
<https://www.nasa.gov/humans-in-space/israel-signs-artemis-accords/> in
2022, Israel Aerospace Industries
<https://en.globes.co.il/en/article-israel-aerospace-industries-signs-1b-deal-1001483830>
signed a $1 billion military equipment deal with Morocco in July 2023,
supplying satellites used for communication, radar, and espionage purposes
<https://www.ynetnews.com/article/byvwkjowa>. Beyond offering an economic
lever, Morocco enabled the sale of technologies used in the Gaza genocide
following their testing in the field such as drones.

Israel also aimed to strengthen its energy ties with Egypt
<https://www.reuters.com/business/energy/eu-israel-egypt-sign-deal-boost-east-med-gas-exports-europe-2022-06-15/>,
building on a 2018 agreement to buy $15 billion worth of Israeli natural
gas over ten years. In June 2022, Israel and Egypt signed an MoU to
increase natural gas exports to Europe. Under this agreement, the EU would
encourage European companies to participate in Israeli and Egyptian
exploration tenders, facilitating Israeli gas exports to Egypt via existing
pipelines and Egypt’s LNG exports to Europe. This agreement followed
Israel’s unsuccessful attempts
<https://www.ft.com/content/78ff60ca-184c-11e7-a53d-df09f373be87> to create
its own pipeline directly to Europe. Effectively, Egypt became dependent on
Israeli energy for local consumption and to gain foreign currency to fund
its budget from the sales of liquified Israeli gas.

In Jordan, Israel sought to deepen the country’s reliance on its energy and
water resources. After signing a $15 billion gas deal in 2014 to meet 40%
of Jordan’s electricity needs with Israeli gas, Israel, Jordan, and the UAE
signed an MoU in November 2022 to swap Jordanian solar energy
<https://www.timesofisrael.com/israel-jordan-uae-sign-new-mou-on-deal-to-swap-solar-energy-for-desalinated-water/>
for Israeli desalinated water. In 2021, Israel had already agreed to double
its water exports
<https://www.timesofisrael.com/liveblog_entry/israel-signs-deal-to-double-water-supply-to-jordan/>
to Jordan increasing Jordan’s dependence on Israel.

Israel even worked to integrate itself into hostile environments. In
October 2022, Israel and Lebanon finalized an agreement
<https://edition.cnn.com/2022/10/27/middleeast/israel-lebanon-sign-gas-deal-intl/index.html>
defining their maritime borders in the Mediterranean. The agreement allowed
for Kraish and Qana fields to be exploited under a revenue-sharing
understanding.

Shortly thereafter, in June 2023, Israel quietly approved the development
of Gaza Marine
<https://besacenter.org/why-israel-approved-development-of-the-gaza-marine-gas-field/>,
a small offshore gas field near Gaza. This project was intended to benefit
both the Palestinian Authority and Hamas through increased revenue and
energy independence. Both agreements were designed to secure Israel’s
energy supplies and deter Hezbollah and Hamas from targeting Israeli energy
infrastructure during any military escalation creating a strong dependency
relationship.

In its war against Gaza, Israel sought to leverage its new regional
economic ties to discourage countries from opposing it and to incentivize
those who remained complacent to continue their support.
*Israel’s weaponized interdependence*

At the outset of the Gaza war, Israel granted 12 licenses
<https://www.reuters.com/business/energy/israel-awards-gas-exploration-licences-eni-bp-four-others-2023-10-29/>
to six companies to explore natural gas off its Mediterranean coast, with
one beneficiary being Azerbaijan’s national oil company, Socar. Azerbaijan
has played a crucial role in supplying Israel with energy via Turkey.
Despite Turkey suspending trade links with Israel in the aftermath of the
Gaza conflict, Israel continued receiving Azeri gas through Turkish ports.
This agreement with Socar ensured that Azeri fuel continued to support
Israel’s blockaded economy via Turkish transport routes.

Israel also utilized its water agreements with Jordan to mute growing
criticism of its economic ties and the land bridge connecting it with Gulf
countries. In exchange for Jordan’s silence on the war and continued
support for Israel’s regional integration efforts through the India-Middle
East-Europe Economic Corridor (IMEC), Israel extended its existing water
export agreement. Jordan further benefited from increased Israeli imports
via the land bridge with the Gulf, which served as an incentive for its
continued support of the war.

Israel increased its gas exports to Egypt
<https://www.timesofisrael.com/chevron-partners-greenlight-24m-investment-to-boost-gas-production-at-offshore-site/>
during the war to incentivize Egypt’s neutral stance despite some
disruptions. Egypt also benefited from new trade maritime routes
<https://www.middleeasteye.net/news/egypt-ports-become-key-supply-points-israel-gaza-war>
linking Turkey, Greece, and Cyprus with Israel. Israel also used its
influence in the global financial system to restrict funding to the UNRWA
<https://www.amnesty.org/en/latest/news/2024/01/israel-opt-states-must-reverse-cruel-decision-to-withdraw-unrwa-funding/>,
an organization on which both Jordan and Lebanon heavily rely to support
millions of Palestinian refugees. By designating UNRWA as a terrorist
organization, Israel aimed to sever its access to international funding,
thereby exerting additional pressure on Jordan and Lebanon to shift their
positions on the war.

Moreover, Israel capitalized on its close ties with Germany to secure Saudi
Arabia
<https://www.middleeasteye.net/news/germany-rewards-saudi-arabia-its-constructive-israel-stance-lifting-arms-export-ban>
access to advanced military technology. Saudi Arabia contributed to
intercepting
aerial attacks
<https://www.reuters.com/world/us-saudi-arabia-close-finalizing-draft-security-treaty-wsj-reports-2024-06-09/>
on Israel via its airspace, and as a result, Germany approved the sale of
Eurofighter Typhoon fighter jets to Saudi Arabia, relaxing its previous
restrictions on arms sales to the kingdom. This further incentivized Saudi
Arabia to remain silent on the Gaza conflict and it made it remain
interested in normalization with Israel.

A month before October 7, the U.S. launched the IMEC to link Asia with
Europe via the Gulf and Israel, with the aim of enhancing energy, data, and
trade links. The project effectively positions Israel as a central hub for
regional trade, embedding it irreversibly in the regional supply chain. By
integrating Israel into this economic framework, the Arab-Israeli conflict
is expected to conclude, regardless of whether a resolution to the
Palestinian question is achieved. While Hamas’s attacks have disrupted
Israel’s plans in the short term, Israeli Prime Minister Benjamin Netanyahu
in recent speeches to Congress and the UN
<https://www.timesofisrael.com/liveblog_entry/netanyahu-says-israel-saudi-deal-was-close-on-eve-of-oct-7-declares-we-are-winning/>
framed the conflict as a zero-sum game. Israel’s view is that the war is
about securing the Abraham Market Alliance, underpinned by IMEC’s vision of
Israel as the commercial hub of the region. Consequently, both Israel and
the U.S. are attempting to link an end to the Gaza war with a normalization
agreement with Saudi Arabia
<https://www.reuters.com/world/us-saudi-arabia-close-finalizing-draft-security-treaty-wsj-reports-2024-06-09/>.
Israel envisions Gaza becoming part of IMEC, defining victory through its
transformation into a regional trade hub — while decimating Gaza in the
process.
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