Israel-UAE reach a historic fuel deal

Dubai/Jerusalem: – United Arab Emirates (UAE) and Israel signed a historic agreement for the use of Eilat Ashkelon pipeline, connecting the Red Sea to the Mediterranean Sea. As per the agreement, the oil supplied to the European countries will be passing through this pipeline. This is considered to be an important development, after the establishment of diplomatic ties between Israel and UAE, last month. Iran had built the Eilat Ashkelon pipeline in collaboration with Israel, before the Islamic revolution. Therefore, an intense reaction is expected from Iran regarding the agreement.   

israel-uae-oil-dealIn September, Israel and UAE established cooperation through the Abraham Accord, setting aside all the differences. Four days ago, various agreements were signed between leaders and officials from Israel and UAE, in Abu Dhabi, in the presence of the US secretary for Treasury, Steve Mnuchin, to take this cooperation forward. These included the primary agreement between Europe Asia Pipeline company from Israel and Med-Red Land Bridge Limited from the UAE. As per this agreement supply of oil from UAE to the European countries, will be made through the Eilat Ashkelon pipeline, connecting the Red Sea and the Mediterranean Sea.   

This agreement between Israel and UAE is worth $800 million and it is claimed that this agreement will reduce the movement of oil through the Suez Canal, to a great extent. Most of the oil going, from the Gulf countries to the European countries passes through the Suez Canal and the Egyptian fuel pipeline. But against the background of the mounting tension between the European countries and Turkey in the Mediterranean Sea, concerns are being expressed over the security of the oil movement through the Suez Canal. In this scenario, the agreement between Israel and UAE for the use of Eilat Ashkelon pipeline, joining the Red Sea and the Mediterranean Sea, is being viewed as a viable alternative for the Suez Canal. It is claimed that the other countries in the Gulf also may consider the use of this pipeline in the future. The Eilat Ashkelon pipeline was built by the then-dictator of Iran, in collaboration with Israel, in the 1960 decade. The pipeline can supply 600,000 barrels of oil per day. In the past, provisions for the storage of 12.5 million barrels of oil had been made in these Israeli cities. Till the Islamic revolution in Iran, in 1979, the pipeline was used to supply oil to the European countries. But after the extremist groups formed a government in Iran, the use of the Eilat Ashkelon pipeline was abandoned. A few years ago, Iran had accused that Israel was secretly using the Eilat Ashkelon pipeline. Iran also demanded a compensation of $1 billion from Israel. In this scenario, an intense reaction is expected from Iran, regarding this agreement between Israel and UAE, which may rock the Iranian oil business. 

Leave a Reply

Your email address will not be published.