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The Economic Value Of The Middle East – The US’ Relationship With Israel

In response to Israel’s bombing of the Gaza Strip after October 7, 2023, the Houthis have intercepted ships sailing to and from Israel using the Red Sea. The first interception occurred on November 19, 2023, and since then more than a dozen ships have been intercepted. This has led to many shipping companies including Maersk or Hapag-Lloyd to pause shipping through these waters.

The United States launched an operation called ‘Prosperity Guardian’, to deter the attacks by the Houthis with the help of an international coalition including the United Kingdom, Netherlands, Norway and Bahrain among others. According to the United States government, this was done as they believed that the actions of the Houthis put innocent mariners in danger and violated international law.

Additionally, even China has stepped in to denounce the attacks, and called for a cease-fire in Gaza, to help stop the retaliation from the Houthis in the Red Sea.

It is clear that the actions of the group have caused a severe international reaction. Why?

The world needs those ships to pass through. It relies on the trade route between the Suez Canal and the Bab-el-Mandeb Strait in the Red Sea. Commodity transportation makes up a significant part of globalised economies. Stopping shipments through this waterway halts a sizable portion of global trade and threatens to slow down economic growth. This can also lead to an increase in the prices of products.

While this is a pretty straightforward analysis, it underscores how the world values the Middle East, and how countries such as the United States and the UK need to have a strong foothold within the region. The economic value of the Middle East is not just restricted to the fact that it provides access to the rest of the world but rather that it is also densely rich in oil. The world runs on oil – everything needs fuel. Even with non-fuel alternatives to commodities or even production, the cheapest option, and the most common option, is using oil.

An important fact to note is that most countries including the US, get their oil from the Middle East. They have developed amicable relations with countries such as Saudi Arabia and the United Arab Emirates, but they need to make sure that they always have access to their oil, no matter what, or they will not be able to sustain their fuel-based economies.

The biggest ally that the West has in the Middle East is Israel. g. In fact, Israel relies the most on the States for their military funding. This reliance is primarily to help Israel build their defences as one of the isolates in the Middle East and also their control over Palestinian territories. Before 2020, Israel was not recognised by most countries in the region. However, after the Abraham Accords, there was a development of cordial relations with other Middle Eastern countries and Israel.

It can be said that Israel used the States as their ‘big brother’ to help them make friends. After October 7, 2023, this reliance was exponentially intensified. The background of the isolation of Israel was primarily due to the conflict with the Palestinians and the majority of the Middle East declaring its support for their fellow Arabs. It was also exacerbated by the additional conflicts with countries such as Syria, Lebanon and Egypt. The response to the attacks on October 7 has dismantled what the US attempted to create for Israel in the region and at the same time has shown how it will do everything it can to ensure their foothold in the Middle East, even if it means their government’s policies are called into question.

Since the start of Israel’s military aggression in Gaza, the US has attempted to help paint the image that the former is a victim and needs to be treated with sensitivity. However, beyond a certain point, the States cannot say that they can control Israel when they are unable to get the country to move for a de-escalation in conflict. Either that or Israel is still aggressive because they have been given back-door support by the US. This is because despite the White House calling for a halt to the violence, the government still approved military funding military with weaponry which is consistently being used in Gaza.

The reason that all this is relevant is that major oil drilling contracts were given to oil and gas fields located near Gaza, and Israel did this with the support of their ‘big brother’. Since these deals were done with Israel, they must have complete control of the area surrounding those oil fields, and further, it highlights that the Middle East, will always be valued for its economic output and what it can give.

Thus, the recent developments in Israel and Palestine have opened our eyes to the status of the Middle East in the world. This is highly relevant due to the awarding of oil contracts to companies in the midst of a military campaign. Israel has already rejected the US’ call for a sovereign Palestinian state, which underscores that the oil that will come from these contracts will benefit the nation. The output from there will also benefit the US as it will be within the control of their biggest ally in the Middle East. Ultimately, this shows that the Middle East is simply an ‘oil cow’ and will always be treated as such for the global economy that sustains itself on oil.  

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