Israel to propose Saudi-Israel oil pipeline

Israel is going to propose the construction of an oil pipeline between Saudi Arabia and Israel, Globes reported, using its formal relations with the United Arab Emirates to promote the plan.

The land pipeline would transport oil and distillate between Israel and Saudi Arabia, which do not share diplomatic ties, using existing Eilat Ashkelon Pipeline Co. Ltd. (EAPC) infrastructure. 

Sources informed Globes that meetings have taken place at a high level in recent days between senior figures from the ministries of defence and foreign affairs as well as EAPC chairman Erez Kalfon and CEO Itzik Levy.

An oil pipeline between Israel and Saudi Arabia would financially benefit Israel while providing Gulf countries with a safer and cheaper oil transport mechanism. 

The UAE announced the end of its boycott of Israel last month, allowing commerce to flow between the oil-rich Emirates and Israel and paying the way for cooperation in a host of sectors.

The US-brokered deal, which was officially signed at the White House on Tuesday, hinted the countries could also work together on an energy project.

The deal marks the first time Arab nations have established relations with Israel since Egypt in 1979 and Jordan in 1994.

The EAPC, which changed its name to Europe Asia Pipeline Co. earlier this year, is planning to extend Israel's Eilat-Ashkelon pipeline 700 kilometres southeast to the Yanbu oil refineries in Saudi Arabia, Globes reported.

Such a plan would allow the kingdom to export its oil to Europe and other markets while avoiding the Strait of Hormuz, where Saudi Arabia and the United States have accused Iran of carrying out attacks on oil tankers.

"The geopolitical risks in the Persian Gulf region only increase the attractiveness of the EAPC system,"  EAPC deputy manager commerce and marketing Effie Milutin said in a S&P Global Platt's article.

"Incidents around the Strait of Hormuz - which transports around 20% of all global oil supply - have increased the oil and shipping industry's concerns over security of supply, with shipments via the Red Sea's Bab el-Mandab commodity chokepoint seen as an alternative route."

The pipeline, which would cross the Red Sea either overland or under water, would likely face strong environmental pushback.

Such a project would also likely be targeted by substantial political blowback across the region.

A controversial but lucrative natural gas deal between Jordan and Israel - which have had diplomatic relations since the 90s - was subject to years of mass protest, with critics claiming the kingdom buying the "enemy's gas" amounted to "occupation".

Despite lacking formal ties, Israel and Saudi Arabia, among other Gulf nations, have reportedly conducted a swathe of backdoor talks over the past year.

This backdoor diplomacy came out into the open recently when Bahrain and the UAE formalised relations with Israel.

For Saudi Arabia, Israel's shared enmity for Iran may trump the powerful and popular anger over the kingdom normalising ties with Israel. Formalising such an alliance, however, could be hard to achieve. 

While dissent is infamously hard to vocalise in Saudi Arabia, normalisation with Israel could prove incredibly unpopular.

Earlier this year Israel began exporting gas from its offshore Leviathan field to neighbours Jordan and Egypt - the only other two Arab countries it has peace treaties with - under a 15-year agreement.