Functional Peace: Green Energy Cooperation as a Foundation for Israeli-Gulf Normalization
Summer 2026
EXECUTIVE SUMMARY: The article examines how renewable energy cooperation could provide a practical foundation for deeper relations between Israel and the Gulf states. As Gulf countries seek to diversify their economies and maintain their influence in a changing global energy market, Israel’s expertise in renewable energy, water management, and desalination creates opportunities for mutually beneficial cooperation. Drawing on the Abraham Accords and regional water-for-energy initiatives, the article argues that functional economic ties can strengthen diplomatic relationships even amid political tensions. It identifies Saudi Arabia, particularly through Vision 2030 and its emphasis on energy diversification, as a potential partner for future cooperation, while acknowledging that the Palestinian issue remains a major obstacle to formal normalization. Green energy diplomacy could therefore serve as an incremental means of building trust, economic interdependence, and greater regional stability.
As the global energy landscape shifts away from fossil fuels, the geopolitical consequences extend well beyond climate policy. Countries dependent on oil exports are acknowledging this new reality and must learn that renewable energy is not simply a means of environmentalism but a vital form of diplomacy. Rather than taking a passive role, Gulf countries are investing billions of dollars into the creation of groundbreaking renewable energy technology. Israel, in addition, has long been a leader in green energy and desalination technology, bringing valuable knowledge and physical technology to the field. Green energy has shifted from an issue that was on the periphery of most nations’ political agendas to one that carries significant weight and potential. History has shown that international cooperation based around financial and economic issues creates a more durable foundation. Renewable energy technology holds significant economic potential and political importance, potentially serving as a foundation for improved relations between Israel and Gulf countries.
For many of the Gulf countries, interest in leading the development of renewable energy is multifaceted. One clear reason is the global outcry for an increase in sustainable energy that stops the depletion of the Earth’s resources. Growing international pressure to reduce fossil fuel dependence has made oil-producing nations increasingly conscious of their global standing and public perception. Anti-oil protests have been some of the most destructive and viral demonstrations in recent history. By showing that they are aware and trying to actively mitigate the damage of oil, Gulf countries improve their image and their position on the world stage. Another reason is the economic potential in being an established leader in renewable energy. While Gulf countries might try to prolong the end of oil reliance as long as possible, it is an eventual reality, and these countries are not comfortable with losing the title of energy superpower. Remaining centrally relevant to energy production, no matter what type it may be, is of core importance to Gulf countries. Lastly, and in a more self-serving nature, the more advanced green energy systems Gulf countries are able to implement in their own countries, the more oil they are able to reallocate from domestic use to the world market. Due to the heavily subsidized cost of oil in Gulf countries like Saudi Arabia, the United Arab Emirates (UAE), and Kuwait, citizens use extremely high amounts of energy. Replacing this supply with cheaply sourced renewable energy would greatly increase the amount of oil Gulf countries are able to sell.
Israel has hundreds of green energy startups dedicated to innovating and improving solar energy systems. Israel has become a global leader both in water technology and renewable energy management, making it a worthwhile partner for countries looking to expand their green energy capabilities. In addition, the similar climate of the Gulf countries and Israel makes Israel uniquely positioned to understand the water needs and energy capabilities that the countries’ landscape gives them. Given the political reality surrounding the oil market, Israel’s reliance on external energy is dangerous and could be potentially detrimental. With a constant threat looming over the nation, with countries that outwardly call for the destruction of Israel being in control of much of the world’s oil supply, Israel has been forced to work harder and faster to innovate energy systems that can increase its self-sufficiency.
The Abraham Accords created an interesting foundation for normalization and cooperation between the Gulf countries and Israel. Signed initially by Israel, the UAE, Bahrain, and Morocco in 2020, the Abraham Accords created a groundbreaking foundation for peace in the Middle East. The foundation of the Accords surrounded the UAE being mostly motivated by curbing Israel from annexing parts of the West Bank and Israel having continued interest in achieving legitimization from its neighbors. The deal established an unlikely pathway to peace and hopeful cooperation between Israel and Muslim-majority nations in the Middle East.
Many important things came out of the Abraham Accords, including proof that functional cooperation creates a much stronger foundation than traditional diplomacy. The war starting on October 7th, 2023, in Israel served as an ultimate test for this theory. Despite extreme amounts of international criticism, the transfer of critical goods and services between Israel and the UAE following the signing of the accords made it much more difficult for the UAE to sever its diplomatic ties with Israel. Bahrain, on the other hand, while still formally tied to Israel via the accords, has halted the partnership and let regional tensions stunt the diplomatic process that had been established. Globalization and the transfer of critical infrastructure like water and energy technology encourage a deeper level of partnership, creating more opportunities for lasting peace.
An important example of this is the water-for-energy letter of intent signed between Israel, the UAE, and Jordan. In 2021, Israel agreed to supply 200 million cubic meters of water annually to Jordan in exchange for 600 megawatts of green energy. Jordan has long faced the challenges of extreme water scarcity due to a rapidly growing population, climate change reducing rainfall, and water loss from theft and corruption. Israel’s desalination technology offered Jordan an opportunity to address these vital issues. Israel’s physical land limitations have also posed a challenge in procuring solar energy, since there is simply not enough space for expansive solar energy fields. This deal was an important landmark in green energy-centered diplomacy. Despite the ongoing political tensions between Israel and Jordan, the deal was renewed until 2025, with both sides fulfilling their promised transfer of goods. While it is important to note that, due to the war, the deal did not increase and grow as intended, the fact that it lasted as long as it did despite the extreme amount of personal tension between both nations should not be overlooked.
This precedent of energy-based cooperation could be a valuable tool towards increased cooperation between Saudi Arabia and Israel. Much like that of Israel and many of its surrounding countries, Saudi Arabia and Israel have had a complicated relationship throughout history. The two nations have worked together numerous times behind the scenes on military and security operations dating back to the 1960s. While the Saudi government was not yet willing to sign the Abraham Accords during its conception, it did not prevent others from engaging in the deal.
With its influence and geographical position, Saudi Arabia could have been a major roadblock for nations like Bahrain engaging in the Abraham Accords, yet it took no such actions. There were even talks of a normalization agreement between Israel and Saudi Arabia prior to the outbreak of war in 2023. Reaching a state of normalization between Saudi Arabia and Israel, however, was not and will never be a simple process. The Palestinian question is one of great importance to the Saudi government, and without a clear plan in place for the resolution of that conflict, there is almost no chance for formal relations between the two nations. Rather than the UAE’s approach of using existing diplomatic ties to try and influence Israel’s actions regarding the West Bank and Gaza, Saudi Arabia needs a clearer change in Israeli actions prior to a deal. Another key factor of Saudi Arabia’s policies is the positioning of Medina and Mecca within the country, two of the most important sites to Islam. The specific pressure from the Wahhabi clerical establishment, the governing body of those holy sites, to advocate for the Palestinian issue and emphasize the importance of establishing a Palestinian capital in East Jerusalem adds another layer of complexity for any potential future of peace between Israel and Saudi Arabia.
This history creates a complicated pathway forward for Israel and Saudi relations, making it clear that formal normalization is far from being established. Economic cooperation, based on Saudi Arabia’s history of tolerance and willingness to covertly cooperate with Israel where it will benefit them, however, is not a far-fetched next step. Released in 2016 by Crown Prince Mohammed Bin Salman, Saudi Vision 2030 is a blueprint outlining how Saudi Arabia will strengthen its economy, culture, and the nation as a whole by 2030, based on three main pillars. The second pillar emphasizes a thriving economy, especially by incorporating more green energy and heavily investing in technology. Through the language of Vision 2030, the Saudi government once again demonstrated that green energy is a driving force in its national agenda. Saudi Arabia fits this framework for three specific reasons. The first is its stated interest in becoming a global superpower in renewable energy. Second, it has worked hard to improve its world standing by publicly investing deeply in renewable energy innovation. Lastly, according to the US Energy Information Administration, nearly 30% of Saudi Arabia’s produced oil is used domestically. The Crown Prince has been extremely open about his green energy initiatives and technological expansion.
Although Saudi Arabia has fallen short in implementing green energy systems and output, it continues to sign deals and create partnerships based on the innovation of renewable energy technology. In Layla Ali’s article published by the Gulf Research Center, she discusses the importance of Saudi Arabia’s green energy diplomacy and the nation’s shift towards prioritizing diplomatic efforts. Ali states, “Economic diversification and energy diplomacy reflect the Kingdom’s drive to transition from a hydrocarbon-dependent model toward a diversified, innovation-based economy, leveraging energy partnerships not only as a source of revenue but as a tool of global engagement and stability.” She also discusses the 2025 ACWA power deal signed between Saudi Arabia and various European nations, along with the ongoing India-Middle East-Europe Economic Corridor (IMEC) discussions, as important examples of energy diplomacy. Through their diplomatic actions, Saudi Arabia has proven that using green energy as a tool and diplomatic foundation does not depend on how successful it has been at actually producing the energy itself, even though that remains the eventual goal. Rather, they are willing to continue to invest billions of dollars and countless resources into the creation and maintenance of energy-specific diplomacy.
It is important to acknowledge that the Palestinian question and strong belief in the prioritization of a two-state solution is a key deterrent in formal normalization in Saudi-Israel relations. That, along with the ongoing political tensions in the region as Israel continues to engage in warfare with Hamas, Hezbollah, and the Houthis, stands as a roadblock to a formal and public relationship between Saudi Arabia and Israel. It does not, however, prove to be a sure deterrent to lower-level cooperation or a transfer of technology between the two countries, which have a history of private partnership. Given the importance of energy diplomacy to the Saudi government, if Israel can capitalize on the collaboration through the development of the IMEC and their shared interest in green energy, the two nations will be able to form a strong economic partnership.
While it might not be enough to inspire full formal normalization, green energy diplomacy has the power to gradually shift the dynamics of cooperation between Israel and many nations in the Middle East. The central importance of renewable energy to Gulf countries and the lower-stakes nature of energy diplomacy make it a promising pathway to cooperation. Environmental and ecological cooperation is uniquely positioned as a strategic first step for cooperation as well as one that is stronger and longer-lasting than most diplomatic efforts. For Israel, recognizing green energy cooperation not merely as an economic opportunity but as a deliberate diplomatic instrument could prove to be the most pragmatic and sustainable path toward building the foundation for a future of greater regional stability.
Yael Rosenberg is an undergraduate at Northeastern University and a Summer 2026 intern at the Begin-Sadat Center for Strategic Studies.