The billion-dollar UAE-Israel gas deal will go forward

The ongoing bombing of Gaza is unlikely to deter the UAE from investing big in its new ally’s gas fields.

In April, the United Arab Emirates’ Mubadala Petroleum, which belongs to Mubadala Investment Co, a sovereign wealth fund with $232bn in assets, signed a memorandum of understanding to buy a 22 percent stake in Israel’s Tamar offshore field. Once completed, this will be the biggest business deal between the two Middle Eastern nations since they normalised their ties in August 2020. While the recent escalation in the Occupied Palestinian Territories and Israel’s ongoing bombing of the Gaza Strip are expected to significantly increase the political risks associated with investing in the Israeli oil and gas sector, they are unlikely to deter Mubadala from completing the landmark deal. The UAE has a lot to gain from the purchase, believed to be worth as much as $1.1bn, both economically and politically. Moreover, Israel is determined to complete the Mubadala deal at any cost, as it will increase other foreign investors’ interest in its oil and gas sector.