When Israel looks at the greatest threat to its long-term hopes for the future, these days it’s looking out to sea. The old issues are on the table, of course: Iran’s nukes, the Palestinians, the Syrian slaughterhouse next door and growing regional instability. But if there’s a place where a sudden, out-of-control war is likely to erupt, it’s probably not going to be called the Sinai, the Golan, the West Bank (or Judea and Samaria). It’s going to be called Leviathan, Dalit or Karish—the vast fields of natural gas and oil discovered in the deep waters between Israel and Cyprus over the last five years.

Who controls that wealth is likely to dominate the economic future of the region for generations to come. The Israelis know it. So do their allies, their rivals and their enemies. And tensions are mounting by the day.

“All the elements of danger are there,” says Pierre Terzian, editor of the oil industry weekly Petrostrategies: there is competition for huge resources, there are disputed borders, and, not to put too fine a point on it, “this is a region where resorting to violent action is not something unusual.”

The United States government is watching warily, trying to broker diplomatic settlements and, so far, failing. No longer inclined to be the region’s policeman on land or in the air, much less at sea, Washington is scaling back its presence in the Middle East while just about everyone else is increasing theirs.

Israel is rushing to create “the most technologically advanced fleet in the Eastern Mediterranean,” according to a report in Tablet Magazine. Turkey is flexing its maritime muscles with plans to spend as much as a billion dollars on a multi-purpose amphibious assault ship that will give its fleet blue water capabilities like never before. The Iranian-backed Hezbollah militia in Lebanon, meanwhile, is known to have naval missiles, and has used them in the past, sinking a cargo vessel and holing an Israeli warship during the Lebanon war of 2006. Russia is expanding both its naval and commercial presence in Syrian waters, despite the Syrian civil war. It inked a $90 million, 25-year exploration deal with Damascus last Christmas Day.

The area in question was roughly defined in 2010 by the U.S. Geological Survey. It estimated that in an area of the Eastern Mediterranean dubbed the Levant Basin Province (PDF) there are some 122 trillion cubic feet of natural gas and 1.6 billion barrels of oil—and possibly twice that much. The basin runs from near the Syrian port of Tartus (which is also where the Russians have their naval base), down the entire coast of Lebanon, Israel and Gaza, and out toward Cyprus.

That oil and gas could be found there was not entirely a surprise. The first major discoveries were made, in fact, off the coast of Gaza in 2000 in waters supposed to belong to the Palestinian Authority. The British company BG Group estimated it could access a trillion cubic feet of natural gas in Gaza’s offshore fields. But Israel effectively shut down that operation in 2001, after a new Palestinian uprising began. Then Hamas took over in Gaza in 2007 and a boycott was imposed. That same year, BG pulled out of negotiations with the Israeli government and in 2008 shut its office in Israel. Since then, despite occasional headlines to the contrary, the whole operation has been on ice. As BG spokesman Mark Todd told me in an e-mail this morning, “our position on Gaza Marine has not changed for some time.”

Israel’s position in the oil and gas world, on the other hand, changed radically. Energy prices increased at least five-fold during the first decade of the century, making all kinds of exploration and extraction potentially profitable, even if it meant drilling many miles below the surface of the sea. Noble Energy out of Texas, partnering with Delek Group and other Israeli companies, started uncovering one major find after another in 2009 and 2010. That included the huge Tamar field, which started producing last year, and the enormous Leviathan field, which is estimated to hold 18 trillion cubic feet of gas. Altogether, there’s supposed to be enough gas to meet Israel’s requirements for the next 150 years.

“This means geopolitical power for Israel, which needs it now more than ever,” Delek’s Yitzhak Tshuva told a conference in 2011. And top Israeli officials, including Prime Minister Benjamin Netanyahu have left no doubt they see these oil and gas resources as a huge factor securing Israel’s political, diplomatic and economic future. Within a few years, indeed, Israel hopes to be a major supplier of gas to Europe and also to its Arab neighbors Jordan and Egypt.

The biggest threat to these projects could be Turkey. Under Prime Minister Recep Tayyip Erdogan, its relations with Israel have gone from warm to cold, and just recently have begun once again to thaw. Turkey—and the northern half of Cyprus, occupied by its troops since 1974—have been largely left out of the Levant Basin boom. Ankara has been accused of saber rattling to intimidate would-be investors in the Aphrodite field that belongs to the internationally recognized government of Cyprus on the southern half of the island. But Turkey would also like to be the conduit for a pipeline taking Levant Basin gas to Europe, and that won’t happen unless Cyprus and Israel want it to. So that has tempered Erdogan’s truculence a bit.

The hottest flashpoint at the moment is between Lebanon and Israel, which remain, formally, in a state of war. The United Nations defined their mutual land border in 2000, but not the lines of demarcation between their 200-nautical-mile “exclusive economic zones.” As the undersea gas rush heated up in 2010 and 2011, it turned out their claims overlapped by about 860 square kilometers (332 square miles) in a potentially rich portion of the Levant Basin.

Although the Israeli press frequently raises the specter of some aggression against its oil and gas installations by Hezbollah or even by the minuscule Lebanese navy, outside observers suggest the chance of such unprovoked attacks are slim to nonexistent. Because of its activities in neighboring Syria, “Hezbollah just doesn’t have these kinds of resources and they are trying to manage a very delicate local mood,” says a well-placed source close to the Shiite communities in Beirut. “More significantly, Iran has no interest whatsoever in this kind of collision now. And what Iran wants, Hezbollah does. It’s the Israelis who are trying to take advantage of a nervous moment all around and see what they can get out of it.”

In practical terms, says Terzian at Petrostrategies, nobody is going to invest with Lebanon in disputed waters. There are no Lebanese companies there capable of carrying out the drilling, and there is no military force that could protect them. But on the other side, things are different. “You have Israeli companies that have the ability to operate in offshore areas, and they could take the risk under the protection of the Israeli military.”

War on the high seas of the Eastern Med is not inevitable, of course. U.S. Ambassador Frederic Hof, now at the Atlantic Council’s Rafik Hariri Center, led the diplomatic effort to sort out those differences for much of 2011 and 2012. “EEZ disputes are very common around the world,” he tells me, and “they are normally settled through common sense compromise.”

But, then, common sense compromise has never been a common attribute among the nations of the Middle East.