Friday, June 13, 2008

Believe it or Not: Iran Supplies Oil to Israel

From The Jerusalem Post:
"I don't see any problem if Iranian oil is arriving in Israel," said Moshe Shahal, who served as energy minister from 1984 to 1990, "because it's not coming straight from Iran."

Shahal explained that once oil is on the open market, its source becomes clouded. In a sense, he said, the oil loses its nationality while retaining its quality.

"The national oil companies sell their oil to buyers who in turn sell the oil on the free market," Shahal went on. And it was entirely possible that Israel had therefore been buying oil that originated in Iran for years. "The people selling the barrels of oil never see a barrel of oil in their life, they're just making the sales," he said.

"In my time, people came to me and said we had the opportunity to buy oil from all kinds of exotic locations - including Libyan oil or Syrian oil - countries with whom we obviously don't have normal relations," said former Labor MK Shahal, now a lawyer in Tel Aviv. "I approved those purchases, because it was good oil, and it wasn't coming directly from the governments of those countries, but from private sellers on the free market."

Today, he said, "I don't believe there is a target to specifically buy oil from Iran. But if it is being purchased, it would be through these types of opportunities."

The issue arose earlier this year, when, an Israeli Web site that follows business and energy-related stories, asserted that Iranian oil was regularly reaching Israel, despite the dire state of relations between the two countries, with Teheran regularly predicting Israel's imminent demise and Israel leading the calls for greater international efforts, including wideranging trade sanctions, to thwart Iran's nuclear program. reported that the oil was being transported and purchased through one of the world's largest commercial ports, Rotterdam.

"This is well known around the world," said Moshe Shalev, the editor of EnergiaNews and the author of the article. Shalev said that after the oil is purchased through a third party, the Haifa-based oil company, Eilat-Ashkelon Pipeline, stores it and then moves it to Bazan, Israel's largest oil refinery, also located in Haifa, to prepare it for commercial consumption.

Shalev cited a source with ties to Bazan as initially leaking the story. He maintained that the Eilat-Ashkelon Pipeline has Iranian ties dating back to the time of the shah.