Is Israel indirectly buying Iranian oil?

Ex-energy minister Shahal says it's possible, adds he used to authorize purchases from Syria, Libya.

By ABE SELIG
June 12, 2008 23:15
4 minute read.
Is Israel indirectly buying Iranian oil?

rotterdam port. (photo credit: AP)

 
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Having adamantly denied for months that Israel could possibly be purchasing any oil originating in Iran, an Israeli official has now acknowledged that the Jewish state cannot be sure that Iranian oil is not coming here indirectly, and a former Israeli energy minister has told The Jerusalem Post that Iranian oil may have been imported indirectly for years and that he would have readily authorized such purchases himself. "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 EnergiaNews.com, 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. EnergiaNews.com 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. The National Infrastructures Ministry initially flatly denied any such supply route. Spokesman Assaf Azoulai told the Post, "Every oil shipment to Israel comes with certification as to where it's from, and Israel is not purchasing oil from Iran." But Azoulai subsequently told the Post, "We buy oil from the biggest producers in the world, and there's no way of knowing where it comes from." Nonetheless, he still maintained, the "rumor" of Israel buying Iranian oil was "nonsense." In a written reply to the Post, an Eilat-Ashkelon Pipeline spokeswoman denied the EnergiaNews claim that her company buys oil at all, stating that it only provides "logistical services at the port and assists in the transportation of oil." The Eilat-Ashkelon Pipeline was set up to transport oil from the shah's Iran to Israel. Such trade dated back to the 1950s, but the pipeline was opened in 1968 to ease the supply. Iranian oil, which was shipped to Eilat, was both consumed in Israel and transported on to Europe. After Iran's Islamic revolution in 1979, all direct contacts with Israel - oil deals included - were severed. A spokesman for Bazan also categorically rejected the idea that his company uses oil originating in Iran. "That's absolutely not true," he said. "We know where all of our oil comes from, and none of it comes from Iran. It is all labeled and orderly. We are not buying oil from Iran, period." A spokeswoman at the Iranian Embassy in London also distanced the Islamic Republic from any such supply. "I can confirm that Iran has no deal with a company having anything to do with Israel," she told the Post. But echoing Shahal's explanation, world oil market specialist Shmuel Even said that Israel may very well be making such purchases indirectly. "Oil is a commodity, like gold," he said. "You can buy it from anybody and sell it to everybody. It's quite possible that Israeli companies are buying oil in Europe which originated in Iran. But it's not official, it's on the free market, and I don't think it's a political issue." The harbor master at Rotterdam Port, T. Selegars, said that both Iranian and Israeli ships came through his port, and that the Iranians were depositing shipments of crude oil there. "A hundred million tons of oil are transported through the port every year, and ships come through from all over the world," he said. "Iranian ships are bringing oil to Rotterdam, and it is theoretically possible that oil is transported from here to Israel." After the EnergiaNews piece was first published, in March, an oped article in the UK's Guardian newspaper termed the alleged Israel-Iran connection the "definition of hypocrisy" given Israel's call for heightened economic pressure on Teheran. The story was also cited by the Swiss newspaper Sonntag after Israel complained that the Swiss foreign minister's March visit to Iran and subsequent signing of a multi-billion euro contract for natural gas was an "act unfriendly to Israel." Quoting an "energy expert from one of the leading Israeli papers," the Swiss report stated, "Israel has been importing Iranian oil for many years." That article went on to mention that the purchases were made on the free market and not directly from Iran.

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