Turkey-Israel determined to double trade volume to $8B in next few years

Six-and-a-half years after the Mavi Marmara crisis, the Turkish-Israeli reconciliation deal has left both countries determined to enhance bilateral relations, especially in the fields of economy and energy, which Israeli Ambassador to Ankara Eitan N'eh pointed to while speaking to members of the press yesterday: "Trade volume between Turkey and Israel may increase to $8 billion in the next few years." The ambassador stressed that the potential for Israeli-Turkish cooperation in the field of energy is great.

Turkish-Israeli relations sank to a new low after the 2010 Mavi Marmara flotilla incident in which Israeli soldiers attacked a Turkish humanitarian aid vessel bound for Gaza in international waters, worsening already tense relations regarding the blockade of the Gaza Strip and virtually freezing ties between the two countries. After both sides withdrew their ambassadors in the wake of the incident, Turkey and Israel began to seek ways for reconciliation years after the incident. On that note, Turkey and Israel synchronously appointed new ambassadors as part of the normalization process. The Israeli envoy to Ankara, who has served for nearly three months now, said: "Trade [volume] between the two countries can and must be doubled. In the next few years, bilateral trade volume can be increased to $8 billion."

As the new chapter in Turkish-Israeli relations is expected to include high-level official visits as part of the normalization process, Israeli officials affirmed that discussions on building a gas pipeline that will transfer Israeli gas to Turkey is ongoing and the signing of an agreement between the two countries is expected by summer of this year. During his visit to the 23rd World Energy Congress in Istanbul in October 2016, Israeli Energy and Water Resources Minister Yuval Steinitz told members of the press that "Turkey and Israel will examine the feasibility of building a gas pipeline." In that regard, Israeli officials have confirmed that the pipeline project is "feasible" and further noted that "Turkey and Israel are aiming to finalize the agreement on the project by this summer. If this can be achieved and the building of the pipelines begins immediately, then the first transfer of gas from Israel to Turkey will occur in 2021."

Meanwhile, Israeli envoy Na'eh stated that reaching a resolution on the long-divided island of Cyprus could also have positive effects on the outcome of the pipeline project slated to transfer Israeli gas to Europe via the route from the Eastern Mediterranean region and Cyprus: "If the Cyprus issue is resolved, then the energy projects can further be enhanced. A resolution on the Cyprus conflict would be a win-win situation for all relevant actors," he added. Continuing on with his remarks by affirming his confidence on the Turkish economy, the Israeli ambassador also listed three priorities including resuming relations, rebuilding confidence and reaching an $8-billion trade volume target. He noted that the field of energy cooperation and trade between Turkey and Israel must be diversified, underlining that "Turkish success is Israeli success."

Israel is seeking ways to reach the European market, which is the biggest in terms of natural gas consumption. The idea seems to be in alignment with Europe's interest, since supply security and diversification of sources top their agenda. Israel can also export its natural gas to Europe via Cyprus and Egypt. However, this option requires establishing liquefied natural gas facilities at a high cost. Turkey, therefore, seems the most advantageous and safest route.