There are many new oil and gas pipelines which are built or planned to construct in the past few years on the territory of Eurasia. Such a number of projects make us to talk about the inflation in transit corridors. Without a doubt one of the main reasons for this increase is the desire of states to ensure safe transit routes for transporting of hydrocarbons.

Israel is also no exception and also searches for additional corridors in importing oil for its own market. Encircled by the potential enemies Israel, as any other country, needs to ensure its national security, including in the field of energy.

Ironically, situated in a region where the huge portion of oil world production realized, Israel has not substantial deposits and mostly dependent on imports. The possibilities of purchasing oil from the neighboring Arab states are equal to zero, and therefore, Israel is compelled to buy oil from suppliers that are outside of the region.

Nowadays, Israel demand is about 300,000 barrels of oil a day. Until the mid-1990s, oil has been imported from Egypt. Now up to 80% of Israel’s oil comes from Russia.

In the 1960s, during the ascent of Arab nationalism in the region, Israel has to find a partner in the face of Iran which also carious about the growing wave of Pan-Arabism. For this reason, Israel as a country aspiring to a stable flow of oil, and Iran, as a state which is desire to export own oil to the European market, have agreed to construct a pipeline Ashelon-Eilat. This pipeline was to have been held throughout Israel and connect terminals at the Mediterranean Sea and the Red Sea. This pipeline was planned as an alternative to transport via the Suez Canal, which by that time had been nationalized by Egypt.

Both Israeli cities are in strategic locations and the convenient for the transportation of oil to bypass Canal. However, the military luck Israel against Egypt and the change of the political regime in Iran in the late 1970s failed to realize of this project.

Today, the project received a second breath. The Israeli government is again reviving the project. Not a doubt in the first place was done in order to guarantee the supply of Russian oil to their markets. But dependence on Russian oil is also not welcomed condition to Israel, and this state is looking for additional routes. That alternative emerged after realization of Baku-Tbilisi-Ceyhan pipeline.

The Azerbaijani oil has come to the coast of the Mediterranean Sea and from here with tankers has been transported to Israel. Israel has far-reaching plans not only for the import of Russian and Caspian oil, but also for the transit of oil through their territory to Ashelon-Eilat pipeline from the Mediterranean to the Red Sea. It would have been possible to make further oil exports to the Far East and South Asia. Thus, the pipeline will be able to be active again, but this time in the opposite direction.

It is noteworthy that in the case of active operation of the pipeline in the region the alternative regional oil will be involved and thus may change balance of forces in the region. In revitalizing the pipeline for oil from the Caspian region and Russia will come through Israel to the Far East.

 Russian oil came to the region in the early 20th century. The English businessman owner of Shell Company Marcus Samuel has transported Baku oil with tankers from Batumi port through the Bosporus and Suez canals to the markets of the Far East.

Today, transportation of oil with the same route is much more problematic because of the limited traffic through the same these water gates and environmental issues. However, the realization of the Baku-Tbilisi-Ceyhan and Ashelon-Eilat pipelines creating new opportunities to reach Asian energy markets, which are growing rapidly.

Completion of Ashelon-Eilat project is viable, given that it does not require expensive. Azerbaijan and Turkey have already shown interest in this project, so there are many look forward to the time when tankers from the Red Sea will remove the non-Arab oil to India and China.  

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This commentary is from USAK’s Energy Review Newsletter
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