In influence Arab oil suppliers have on Japan’s decision-making is decreasing as Japanese executives are increasingly drawn to investments in Israel as the price of oil falls and.

Riding on the back of a visit by Prime Minister Shinzo Abe to Israel in 2015 and Benjamin Netanyahu’s trip to Tokyo in 2014, Japan and Israel have strengthened business ties, signing a series of economic agreements over the past two years.

“Abe had a good impression; he liked Netanyahu’s mentality,” Yoshimitsu Kobayashi, chairman of Mitsubishi Chemical Holdings said.

Since the Arab League, which has long backed a boycott of Israel, was the main supplier of oil to Japan, trade between the two countries was minimal for years.

“Geopolitics is changing in the Middle East and as oil prices come down, strategically it’s not as important. Japan is changing its mind,” said Kobayashi.

Kobayashi said that particularly attractive are Israel’s prowess in Internet, biotech, and automotive technologies.

However this does not means that Japan has given up on the Arab world.

Though past worries that trade with Israel could annoy Arab nations have mostly faded, Japan’s need for oil will always trump its need for anything Israel can offer, Isamu Nakashima, chief researcher at the Middle East Institute of Japan said.

“But for things to really improve a lot, there needs to be a peace settlement (between Israel and the Palestinians),” Nakashima said.

Japan became Israel’s fourth-largest market in Asia as the bilateral trade in goods in the first seven months of 2016 rose to $1.4 billion from $1.1 billion. As Asia overtakes the United States to become Israel’s largest trading partner after Europe, it is part of a growing shift in focus.

The the $900 million acquisition of chat app Viber by Japanese e-commerce giant Rakuten Inc in 2014 is the deal that put Israel on Japan’s business map. Michael Shmilov, Viber’s chief operating officer said that while doing business in Asia, Viber, which has a big user base in Asia, was approached by Rakuten.

“There are strong cultural differences but at the same time, Rakuten is a global company where English is the official language and we are working closely to reduce the impact of these differences,” he said.

The lack of direct airline flights, something Israel wants to change, is the biggest obstacle, he said.

The $212 million purchase of Israel’s Altair Semiconductor by Sony Corp this year and several others followed the Viber acquisition.

According to the Japan External Trade Organisation, citing Bank of Japan data, after subtracting Israeli investment in Japan, the net investment by Japanese firms in Israel nearly doubled in 2015 to 5.2 billion yen ($50 million).

“The last two years … we’ve seen a great expansion of Japanese activities, many large corporations are coming here, setting up R&D centres and investment flows are rising,” said Avi Hasson, Israel’s chief scientist.

12 projects with Israeli companies have been created by seven Japanese companies – including Panasonic, NEC and Ricoh –who have joined his office’s multinational R&D programme.

Several large Japanese companies planned to set up R&D centres in Israel, said Gilad Majerowicz, head of the Japan desk at Israeli law firm Herzog Fox & Neeman.

At a time of growing calls by some activist groups in Europe and the United States for a boycott of Israel because of its policies towards the Palestinians, for Israel, Japan offers a large market and a source of capital.

(Adapted from Reuters)