oil 2 298.88.
(photo credit: Channel 10)
Israel imports 90 percent of the approximately 250,000 barrels of oil it uses daily from former Soviet Union countries via tankers, a fact that will figure prominently in Prime Minister Ehud Olmert's talks with President Vladimir Putin and other top Russian officials in Moscow this week.
Because Israel has limited fossil fuel resources, these relationships are of extreme importance for the functioning of the country and economy, a National Infrastructure Ministry official told The Jerusalem Post Wednesday.
Of Israel's daily imports, 50% to 60% come from Russia, according to the Russian business daily, RBK.
While the worry about Iran's nuclear program will figure prominently in talks between Putin and Olmert, "the most important issue on the agenda for Moscow is energy cooperation," RBK reported.
The main focus of attention for Russian officials will be on the role Israel affords to Russia in meeting its demand for various energy sources, which experts forecast will grow considerably in the years ahead, according to the paper.
This strategic relationship between Russia and Israel may be the catalyst for a series of proposals to build four pipelines from Turkey to Israel, giving Israel access to Russian and European resources.
There is speculation that one item on the agenda for the talks in Moscow will be the construction of an oil pipeline from Turkey through Israel, ultimately enabling Russia to ship oil to the Far East.
According to sources at the National Infrastructure Ministry, this project would extend the existent BTC pipeline through Israel to Eilat. Presently, the 1,776 kilometer pipeline feeds oil from fields in the Caspian Sea to the Mediterranean coast in Turkey.
Currently, it is nearly impossible to ship oil from Turkey to the Far East because of conditions in the Bosporus Sea. The proposed pipeline would circumvent this problem and would give Israel access to oil being shipped via this route.
"It is too early to talk about the details of this proposal, however the Turks and the Europeans love the concept," the official said.
In addition to the extension of the oil pipeline from Turkey, officials at the National Infrastructure Ministry report that natural gas, water, and electricity pipelines are also under discussion.
Russia currently exports natural gas to Turkey through a major pipeline. The official said that a proposal had been tabled to extend this pipeline to Israel, giving Israel access to Russian natural gas.
The water pipeline would enable Israel to import water from Turkey, in accordance with diplomatic accords which stated that Israel would buy water from Turkey when it was economically feasible.
At present, buying water from Turkey costs twice as much as desalinating water in Israel; therefore this aspect of the agreement has not been enacted. The proposed pipeline would bring down the cost and thus enable Israel to purchase water from Turkey.
The electric pipeline would mitigate a major risk Israel faces because of its isolation from its neighbors. Israel's isolation means that it is not connected to the pan-Arab electric system, essentially making Israel an electric island. If there were ever to be an internal shortage of electricity, Israel would have no neighbors from whom to import electricity. The proposed electric pipeline from Turkey would solve this problem by giving Israel access to Turkish electricity, but more importantly to European electric grids.
Meanwhile, oil prices fell Wednesday ahead of a meeting of the Organization of Petroleum Exporting Countries in Qatar to discuss production quotas and a possible cut of 1 million barrels a day, The Associate Press reported.
Markets were also awaiting the release of weekly US petroleum supply data, which is expected to show a decline in distillate stocks but a build of 1 million barrels in crude oil inventories.
Light, sweet crude for November delivery fell 25 cents to $58.68 a barrel in electronic trading on the New York Mercantile Exchange by afternoon in Europe. December Brent crude on London's ICE Futures exchange fell 60 cents to $60.64 a barrel.