The United Arab Emirates (UAE) has started transporting oil to Europe via an Israeli pipeline.
According to multiple reports, the deal was sealed months after the energy deal prompted Egyptian worries over a ‘rival’ to the Suez Canal for shipping fuel.
Reports further indicate that an Emirati vessel that arrived at the Port of Eilat in southern Israel last week was in fact an oil tanker.
Details show that the tanker hooked to the Eilat-Ashkelon pipeline has so far seen six tonnes of crude (6,000 liters) fed through per hour.
Memorandum of Understanding
Israeli state-owned Europe-Asia Pipeline Company (EAPC) in October last year signed a memorandum of understanding with MED-RED Land Bridge, a company with both Israeli and Emirati owners, to transport oil through the pipeline.
It was signed in Abu Dhabi with US Treasury Secretary Steve Mnuchin and other US and UAE officials present.
The MoU came amid a flurry of deals covering business and commercial sectors from banking to filmmaking, after the UAE and Israeli agreed to normalise ties.
EAPC said in a statement that the collaboration was significant news for the global energy market, since it would offer oil producers and refiners the shortest, most efficient and most cost-effective route to transport oil and related products from the Arabian Gulf to the consumption centers in the West, and provides access for consumers in the Far East to oil produced in the Mediterranean and Black Sea regions.
Eilat-Ashkelon pipeline attack
The Eilat-Ashkelon pipeline, which links two Israeli ports on the Red and Mediterranean seas respectively, came under rocket attack by armed groups from Gaza during Israel’s latest campaign on the besieged territory.
Meanwhile, Israeli officials remain opposed to the passage of large quantities of Emirati oil through the pipeline due to environmental concerns over potential oil spills.
Also Read: Boost to Dubai’s status as it ranks top for international arbitration
Details of the deal have, however, remained a secret among government departments. According to the Kan report, neither the office of Israeli Prime Minister Benjamin Netanyahu nor Israeli National Security Adviser Meir Ben-Shabbat communicated the details to the departments.
Suez Canal
The development comes months after contradictory statements by the head of the Egyptian Suez Canal Authority (SCA) over the possible economic impact of the pipeline on one of Cairo’s most important sources of revenue.
Osama Al-Rabei told Egyptian state TV that the project could in the long-term decrease traffic through the canal by as much as 16 per cent but later backtracked.
It could later emerge that Rabie had downplayed the danger in order not to upset relations between Cairo and Abu Dhabi.
Trans-Israel pipeline
The pipeline, known as the Trans-Israel pipeline is the product of a joint venture between Israel and Iran in 1968, when the then Shah of Iran enjoyed close relations with Israel.
After Egypt blocked the Suez, Israel allowed Iranian oil to be shipped from Ashkelon to Eilat, where it would be destined for European markets.
But when the Islamic Revolution erupted in 1979, Iran’s use of the pipeline ended abruptly. Tehran took legal action over the pipeline and received $1.1 billion from Israel in compensation following a 2016 Swiss court order.
Meanwhile, EAPC expanded, handling oil from Russia and former Soviet states. Company operations were placed under a strict gagging order by a Knesset committee in 2017.
In 2014, the secretive pipeline was the site of a massive oil spill which impacted on a desert and nature reserve in Israel.
UAE Oil Reserves
The United Arab Emirates holds 97,800,000,000 barrels of proven oil reserves as of 2016, ranking 7th in the world and accounting for about 5.9% of the world’s total oil reserves of 1,650,585,140,000 barrels.
The United Arab Emirates has proven reserves equivalent to 299.0 times its annual consumption. This means that, without Net Exports, there would be about 299 years of oil left(at current consumption levels and excluding unproven reserves).
Also Read: Nigeria to prepare its economy for a post-oil era
The United Arab Emirates ranks 24th in the world for oil consumption, accounting for about0.9% of the world’s total consumption of 97,103,871 barrels per day.
