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Growing Activist Pressure Puts Key Middle East Oil Deal On Hold

A UAE oil transport deal is now on hold due to environmental concerns from Israel’s environmental protection ministry following pressure from activists.

The agreement between the UAE and Israel expects to see Middle Eastern oil transported to Eilat, a red seaport, by tanker, which would then be carried by a pipeline across Israel to reach the Mediterranean port of Ashkelon for it to be shipped to Europe.

If approved, this would allow for the transportation of tens of millions of tonnes of petroleum projects, through a new transport link between the Middle East and Europe. A memorandum of understanding was signed between the two states last October but is still awaiting approval, as the ministry continues to delay the process to carry out further discussions around the agreement.

However, the country’s environmental protection ministry has accused the companies involved, Israel’s Europe-Asia Pipeline Company (EAPC) and Israeli-Emirati MED-RED Land Bridge Ltd, of not meeting the conditions laid out by the ministry for the agreement to be approved. 

The halting of the project comes after pressure from green activists who warn of an increase in the risk of an oil spill should the project go ahead. 

In response to the case, the ministry informed EAPC by letter that it would be “delaying the evaluation of your preparations to increase activity in the Eilat port until the government has a discussion and reaches a decision.”

In addition to pressure from green activists, the new Environmental Protection Minister Tamar Zandberg from the left-wing Meretz party has been clear on her opposition to the EAPC-Emirati agreement, a not uncommon stance due to the ongoing political difficulties between Israel and other Middle Eastern states. 

Unlike the previous minister and several organizations involved, Zandberg does not believe the transport project will contribute anything to the Israeli economy and, rather, could pose a threat to the coral reefs of the Gulf of Eilat.

Despite this opposition, there is great hope surrounding last year’s improved diplomatic ties between the two states, which promised greater trade and economic links, as well as open rather than secret cooperation in commerce and technology. Jordan and Egypt already have similar agreements with Israel, making it the third Arab nation to make this kind of agreement with the country. 

In response to the delay, EAPC stated that “severe damage leading to full loss of the entire content of a tanker or external damage to a tanker and significant loss of content” would only occur once every 366,300 years.

A leak in the pipe carrying fuel was evaluated as extremely low, with the potential to occur every 1,111 years. And an insignificant spill may take place every 24 years, however, if this were to occur the leak would be pooled and “no environmental damage or marine pollution would be caused at all.”

But significant public distrust for EAPC does not help the situation as the company was blamed for causing Israel’s worst-ever oil spill in 2014 and was later ordered to pay damages of $75 million. It was coined as the worst ecological disaster in the country’s history.

Approximately 5 million litres of crude oil were spilled in December 2014 after a pipeline belonging to state-owned EAPC ruptured. EAPC will, therefore, have to make sure that its risk assessment of the new transport project is accurate, and win back public and ministry favor to ensure the agreement is approved. 

While the Emirati-Israeli oil transport agreement could open up significant new petroleum transport links across the Middle East and to Europe, EAPC will have to work on its poor reputation and improve its safety practices if it hopes for the UAE oil transport project to go ahead. 

By Felicity Bradstock for Oilprice.com

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Leave a comment
  • Mamdouh Salameh on July 26 2021 said:
    This article is a rehash in substance and word of another article written by Tsvetana Paraskova and posted on oil price.com on 9 June 2021 under the title: “Israeli Minister Calls for Scrapping UAE Oil Pipeline Deal”.

    You did the same before when you posted an article titled:” US Threatens Iran with New Sanctions If a Nuclear Deal Is Not Reached” on 21 July 2021 which was also another rehash in substance and word of an article written by Tsvetana Paraskova and posted on oil price.com on 19 July 2021 under the title: ”US considers Choking off Iran’s Oil Exports to China amid Stalled Nuclear Talks”.

    Are you so short of new original articles that you keep delving into previously written ones with almost similar contents and titles? You should innovate instead. The field of oil and energy economics and geopolitics is very wide.

    Dr Mamdouh G Salameh
    International Oil Economist
    Visiting Professor of Energy Economics at ESCP Europe Business School, London

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