This pipeline spill in Israel is one of the worst eco-disasters in the young countrys history. The pipeline had been designed in the 60s and 70s and first built in order to facilitate trade relations with a then-friendly Iran. Since the fall of the Shah, the pipeline has been used very little until recently when efforts were made to retrofit the pipeline for backflow. Instead of bringing Iranian oil from the Gulf of Aqaba to the Mediterranean as originally envisioned; now, the pipeline can take oil from the refining and receiving facility in Ashkelon and transport it to Eilat where it can be shipped to the Far East where Chinese, Korean and Japanese buyers pay high prices for oil. Where does this oil come from, you might ask? Since Israel has no oil reserves, it seems strange that EAPC and other venture capitalists should spend so much time and money investing in oil infrastructure to transport oil from the Mediterranean to the Far East. Well, two factors are currently in play economically which make this a desirable investment. I will not give my opinions about the geo-politics involved. Number one, is the long-standing desire to be able to avoid the Suez Canal and provide an alternative transportation route. Number Two, is that political instability in Iraq and Syria have opened up new channels for distribution mostly of Iraqi oil, and even more specifically, of Kurdish oil. Oil from northern Iraqi Kurdistan is supplied by multinational commercial operators contracting with the KRG. Turkish companies are providing necessary support by piping the oil supply to the Mediterranean, and Israeli companies may be facilitating sales into the Far East.
Posted on: Sat, 06 Dec 2014 16:00:24 +0000
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