The Real Reason for War in Israel

The Real Reason for War in Israel

Dear Readers,   

Everything is connected. What happens on one side of the world can, and will, affect things on the completely opposite side.

And given the speed of information, the causality of negative events grows increasingly powerful.

Over the past few years, I have outlined what I believe to be a global uprising against the powers of the West – in particular, against the United States and its dollar.

At times, it may be difficult to believe some of my research; much of it seems so far fetched that it belongs in the fiction section of the library.

But here we are and things are growing increasingly dangerous.

Syria’s ongoing civil war has already led to more than 100,000 deaths, while Ukraine’s crisis continues to grow as civilian casualties pile up.

I have already discussed the real reasons for wars in both Syria and Ukraine.

With headlines now focused on Israel, I thought it would make sense to show you another side of the conflict.

The Real Reason for War in Israel

Israel lies in the heart of the Middle East, where energy conflicts rule the lives of those living there.

While you have heard of the long standing Arab-Israeli conflict, what you may not have heard is the amount of oil and gas situated on the borders of Israel which could reap billions for whoever gains control.

Before I continue, I am not stating that the primary reason for war in Israel is primarily over oil and gas. That would be foolish.

The Arab-Israeli conflict has spanned more than half a century and religious and political aspects – or should I say faith-based political control – are deeply rooted in the war.

But what about American involvement? Is the U.S. simply acting asjust a peacekeeper?

What do you think?

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Throughout history, the U.S. has provided more than $700 million to Israel’s missile defence system, the Iron Dome..

But soon, this amount will rise to nearly $1 billion as Obama administration’s has just requested another $225 million to replenish¬†the system.

But why?

As I mentioned before, there is no free lunch. When a country interferes with another, it asks for things in return.

Why would the U.S. spend nearly a billion dollars on a defence system outside its borders?

Since Israel is situated in the middle of major oil and gas corridors, right in between the world’s largest oil and gas fields and Europe (the second largest consumer of oil and gas), the United States needs to have a presence there to protect its interests – and, in turn, its¬†Petrodollar¬†world reserve status.

So other than its geographical location, what makes Israel so important?

The Levant Basin

Over 40 per cent of Israel’s electricity depends on natural gas, with consumption rising year-over-year.

Previously, much of Israeli gas came from Egypt, a nation with many conflicts of its own, including repeated suspension of gas supplies to Israel due to attacks on the Sinai pipeline, and the near-depletion of Israel’s offshore Tethys Sea gas fields.

This made Israel’s number one supplier of gas a very unreliable supplier.

Israel has struggled to keep up with rising demand. As a result, it has been forced very quickly to develop other gas projects to supply its own use, starting first with the Tamar gas field in the Levant Basin, just off the coast of Israel.

The Levant Basin

Location of the three assessment units (AU) in the Levant Basin Province in the Eastern Mediterranean. The boundaries of the Levant Sub-Salt AU and the Plio-Pleistocene Reservoirs AU are coincident. Source: USGS
Location of the three assessment units (AU) in the Levant Basin Province in the Eastern Mediterranean. The boundaries of the Levant Sub-Salt AU and the Plio-Pleistocene Reservoirs AU are coincident. Source: USGS

Israel began gas production at the Tamar gas field in 2013. However, current contracts completely utilize its entire capacity, which means another source of production is needed.

A few years ago, the U.S. Geological Survey (USGS) estimated that the undiscovered oil and gas resources of the Levant Basin Province, just off the coast of the Gaza strip (where war wages on and civilians continue to die), could be as big as 1.7 billion barrels of oil and a mean of 122 trillion cubic feet of recoverable gas.

The Leviathan Gas Field

Together with the Tamar gas field, the Leviathan gas field could transform Israel into a major energy power in the Middle East.

The problem is every one wants a piece of the action.

Over the past 15 years, there have been major hurdles in developing the Leviathan.

The project was first handed to Britain’s¬†BG (British Gas) Group, a Western-controlled entity with major influence from the UK and the U.S., when¬†the late Yasser Arafat signed a 25-year deal on behalf of the Palestinian Authority (PA), granting 60¬†per¬†cent rights to the BG Group.

However, since relations with Hamas and the PA weren’t exactly friendly, things have never¬†been settled. The relationship was so poor that Israel¬†would rather buy gas from conflict-ridden Egypt just to avoid buying gas from the Palestinian field.

After more than a decade since the exploration contract was granted to the West, nothing has happened.
Time and time again, the BG Group, in addition to the British and US governments, attempted to find solutions to move the gas field project forward only to fail.

Let the War Rage On

The Gaza war has been going on and off for years. But do you know why it was reignited this year?

Just last year, Israeli Prime Minister Benjamin Netanyahu finally granted approval to develop the Leviathan gas field, in hopes of creating joint economic interests between Israel and the Palestinian Authority.

The development of the gas field would help avoid another energy crisis in Israel.

However, if the Palestinians were to reap the benefits of gas from along the Gaza strip, the economic implications could make a Palestinian nation-state more viable.

The funds from gas sales – as well as political negotiation power with other nations – would likely make the controller of the gas field the dominant power in the region.

This is why the current war in Gaza will only continue to get worse until there is clear control – a control that cannot be had without influence from larger supporting nations.

Russia vs. the United States of America

Now I have already talked about the battle between Russia and the U.S. and how Ukraine and Syria have both been affected by the two nations.

In short, the U.S. wants control of those areas so that it can coerce Europe into buying gas from the U.S. instead of Russia.

Since the war in Gaza cannot be won without help from larger nations, you can bet both Russia and the U.S. is involved.

The nation that helps Gaza through this conflict will surely be considered a savior of Israel and gain worldwide recognition as a world peacekeeper. And gain control of more oil and gas resources and corridors in the Middle East, of course.

Russia’s Gaza Involvement

Earlier this January, Russian President Vladimir Putin met withPalestinian President Mahmoud Abbas.

The meeting was a prerequisite to officially sign an investment agreement aimed at developing the Gaza offshore gas, as well as a public shot to the West regarding whose in charge.

Abbas announced in Moscow that he is dealing with Russia because it is a major power, stating “We are happy to see that Russia is an active and influential power on the international arena…we would like to see Russia playing a leading role in the Middle East, since it is a major power.”

Of course, Abbas is dealing with Russia because Israel is dealing with the U.S.

Russia already has¬†foothold in the Levant Basin, when it signed¬†a 25-year agreement with Syria last year that gives Russia’s state-controlled Soyuzneftegaz exclusive exploration, development and production rights over 850 square miles of Syrian waters.

If you look on the map, you’ll see that the Levant Basin is off the coasts of Syria, Lebanon, Israel, Cyprus (Russian-influenced) and the Gaza Strip.

With the Syrian deal, Putin has strategically entered Russia into an untapped resource-rich region in the Levant Basin, which will soon become a strategic energy source that could open up new supplies of natural gas to Europe.

I have already told you that Obama is relying heavily on LNG sales to Europe to pay off America’s extravagant spending.

Imagine what would happen to the potential of U.S. gas sales to Europe if Russia has yet another way to send (cheaper) gas to Europe?

When the Leviathan begins production (scheduled for 2017), it will not only supply Egypt with gas, but it could also potentially supply Turkey, which could then supply Europe.

If Russia can gain yet another foothold in this project, the dreams of U.S. LNG sales to Europe will further diminish.

Now do you see why Russia continues to support the Palestinians, while the U.S. continues to fund and support Israel?

You wonder why U.S. sanctions continue to be imposed on Russia?

You wonder why¬†Russia has now suggested¬†that it may ban imports of chicken* from the U.S. and fruit from Europe and is investigating McDonald’s Corp. (MCD) cheese for safety?

(*Russia was the second-largest market, after Mexico, for U.S. chicken last year, according to the USA Poultry & Egg Export Council.)

All of this political drama between the U.S. and Russia won’t stop until there is a clear winner in the Middle East. With so many corridors to control, I don’t suspect it will end fast, or friendly.

Be prepared for worse.

What do you think is going to happen?

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Russia Continues to Bypass the Dollar

Over the past few years, I have talked about all of the nations working together to bypass the dollar in world trade.

A few weeks ago, I talked about how the BRICS nations were working together to diminish the strength of the dollar.

On Thursday, Russia’s central bank issued this release (Google-translated):

“As a priority area discussed the use of national currencies in mutual settlements.¬†Given the urgency of the issue and the interest of commercial structures of the two countries, the meeting decided to establish a working group to develop a mechanism for the use of national currencies in mutual settlements.¬†It will consist of representatives of banks and, if necessary, the ministries and departments of the two countries to coordinate its activities will be central banks of Russia and India.”

In other words, Russia and India are now working together to use their own currencies in settlement to bypass the dollar.

Whatever happens on that side of world, will affect us over here. Pay attention.

BOJ Front Running

On many occasions in the past, I have outlined very simple strategies Рall with great success Рon how to benefit from Japanese stocks by front-running the Bank of Japan.

A¬†few weeks ago, I told you to front-run the Bank of Japan after it announced that it would openly buy stocks in the Japanese market, in particular, the Nikkei 400. Here’s the latest chart:

nikkei400

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Until next time,
Ivan Lo
The Equedia Letter
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