Still technically at war, Lebanon and Israel both have much to gain from the deal. From income relief peering over the horizon for an economically shattered Lebanon, to a vital win for Israel’s Yair Lapid government ahead of next month’s elections, the agreement should bear fruit for both parties.

It is also a regional victory for the Biden administration, which lately has seen diplomatic tensions rise with some of its Middle East allies, especially those in the Gulf. With the possibility of much needed gas from the Mediterranean and averting a potential security crisis between historic enemies, the United States notched an important win in a region where its influence has seemingly diminished.

While there are limitations to the deal, it is perceived as a step forward on more than one front. Here are five ways the landmark maritime border deal between Israel and Lebanon matters:

1) A security crisis averted, for now

Under dispute for years, the 860-square-kilometer area of the Mediterranean potentially harbors billions of dollars’ worth of oil and gas. Tensions worsened earlier this year when, in June, a London-based vessel arrived to develop a gas field for Israel.

Although the rig itself is positioned south of the disputed area, the field it is exploring stretches across what was one of Lebanon’s southernmost claimed lines, prompting Lebanon to warn Israel against “aggressive action” in the disputed waters.

Hezbollah, the Iran-backed Lebanese militant group, later vowed an “escalation” if its rights were not met in the deal, and in July even sent drones toward the gas rig as a “message” to Israel.

Rhetoric from some Lebanese parliamentarians had even used the word “war” to describe a no-deal situation, and just days before the agreement, Israel’s defense minister instructed his troops to “prepare for any scenario in which tensions increase in the northern arena – including defense and offense readiness.”

While both parties beat the battle drums, analysts are skeptical that the dispute would have erupted into full-blown war.

“I’m not sure Hezbollah wanted to go to war,” said Lebanese energy expert Laury Haytayan. “It was just trying to get a better deal.”

Israeli Prime Minister Yair Lapid said that the agreement strengthens Israel’s security, will boost its economy and “ensure the stability of our northern border.”

While the deal is a win for both sides, future security threats are not likely to be eliminated by the maritime agreement, said Elai Rettig, assistant professor in the Department of Political Studies at Bar-Ilan University in Tel Aviv.

2) Lebanon sees potential economic relief

Beyond the security hurdles that exploration and drilling companies faced in the area, the deal could mark the beginning of a key source of income for Lebanon’s crippled economy.

With little to no government cohesion, Lebanon is now in its fourth year of financial meltdown.

The maritime border agreement reached Tuesday will be a “gamechanger” for crisis-hit Lebanon, top negotiator and Lebanese Deputy Speaker Elias Bou Saab told CNN’s Becky Anderson on Tuesday.

“People will start talking to Lebanon again,” Bou Saab said, adding that said the deal will give Lebanon’s youth “hope” and create more trust in the international community.

Under the US-brokered deal, Lebanon would be able to begin gas exploration in the Qanaa prospect – which lays within Lebanon’s exploration block but crosses over into Israeli waters. The Qanaa gas field is yet to be explored, but Lebanon believes it is rich with resources.

Under a consortium led by Total, the French energy company, Lebanon would be able to explore and drill in Qanaa while paying royalties to Israel should gas be found.

While the agreement is a positive step for Lebanon’s economy, substantial economic relief is not expected to emerge overnight, said Rettig. “Right now, it is all a potential,” he told CNN.

“The more positive sense is that if Lebanon can close this deal and show that it is open for business, and Total comes in and starts looking, it can invigorate the market,” said Rettig, noting that it could bring in more investments amid promises of better stability and security.

If Total does indeed begin exploration for the Lebanese, it could also offer incentives for other companies to apply to do the same, said Haytayan, adding that with these prospects in mind, it is yet to be seen what the direct economic impacts will be.

3) Israel can help ease Europe’s gas shortage

Europe’s gas crisis is only deepening. Governments are doing all they can to shield consumers from price shocks, but the crisis took a further dip after explosions damaged Nord Stream 1 and 2 last month. The Nord Stream 1 pipeline was Europe’s main source of Russian gas.

Israel has said that, once a maritime deal is signed with Lebanon, it can begin extracting oil and gas from its Karish field and export it to Europe within weeks.

Lapid has repeatedly spoken about the role Israel can play to help Europe as Western countries try to wean themselves off Russian energy.

While Israel’s gas field is ready, Lebanon’s is lagging far behind. Bou Saab said that Lebanon might see gas in three or four years once Total begins its work in Qana.

“For now, Lebanon is not the market that Europeans are looking for,” said Haytayan, noting that the Levantine country needs years of infrastructure building to be able to find and exploit any gas.

4) A win for the Biden administration

US President Joe Biden and his administration have had a heated year with their Middle East allies, particularly Saudi Arabia.

Relations hit a new low last week when the oil cartel OPEC+, led by Saudi Arabia and Russia, defied the US with the largest output cut since the pandemic. The oil production slash only brought added pressure for Biden.

US mediation efforts were key to achieving the Israel-Lebanon maritime deal after previous administrations’ failed attempts, and analysts say this bolsters the Biden administration ahead of US midterm elections.

5) An eleventh-hour agreement with Lebanon ahead of Israeli elections

Israel is just three weeks away from elections, its fifth in less than four years.

The November 1 vote may pave the way for the re-emergence of former prime minister Benjamin Netanyahu to take back power, unseating the current centrist caretaker Prime Minister Lapid.

Lapid has hailed the agreement as “historic” and a win for Israel on security and economic grounds.

“It is a deal with an enemy state,” Rettig told CNN, adding that it compels Lebanon, which does not recognize the state of Israel, to de facto recognize Israel’s existence on an official level and its maritime border.

But Netanyau and his allies are framing the deal as a “surrender” driven by Hezbollah’s threats, noted Rettig, the Tel Aviv political scientist.

So while Lapid may hope the deal will be a political win for him, it could yet backfire if the opposition’s view catches on with Israeli voters.

“Hezbollah will use billions from the gas to arm itself with missiles and rockets against Israeli citizens, and Iran will position itself in front of Rosh HaNikra (a kibbutz in northern Israel) and in front of Israel’s gas reserves,” Netanyahu tweeted.

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