Of course, one is aware of the importance of the Suez Canal. And one is also aware of the risks that arise from a closure, for whatever reason.
In order to at least minimise this risk and to become less dependent on the Suez Canal, various projects have been underway for decades. In Israel, for example, an oil pipeline was built between Eliat (on the Red Sea) and the port city of Ashkelon (on the Mediterranean) at the end of the 1970s.
The pipeline has a length of 254 kilometres and a daily capacity of 600,00 barrels of oil. However, it is currently in need of repair and also expansion. It is not possible to say for sure to what extent it has been used in recent years.
Two major projects are now planned between the United Arab Emirates and Israel. The first project involves the use of the Eliat-Ashkelon pipeline. For this purpose, the existing port at Eliat (currently not suitable for oil tankers) is to be expanded to include a deep-sea port. As a result, heavy tankers will then also be able to call at the port. The oil will then be transported via pipeline to Ashkelon in the Mediterranean.
The whole thing is to be financed by the Emirati sovereign wealth fund. A total of 10 billion dollars has been budgeted for the expansion of the Eliat port on the Red Sea.
The second project, which is also to be financed mainly by the Emirati sovereign wealth fund, is a railway line between the Emirates on the Persian Gulf via Saudi Arabia and Jordan to the Israeli port of Haifa on the Mediterranean.
The railway project is also designed mainly for oil deliveries, but other goods could also be transported there, which would not be possible in a pipeline.
Jordan is currently struggling with the expansion of the railway connection. The country is still neutral about these plans. Moreover, it would be very expensive. However, goods could then be transported between the Emirates and Israel in only two days. It takes 12 days via the Suez Canal.
The current state of things
At the moment, it looks as if the pipeline project is making good progress and will probably be realised in the near future. The railway line is a different story. The idea is not new either. There was already talk of it in 2017. Incidentally, what would be an advantage for Israel and some other countries would be a disadvantage for Egypt.
Because it would reduce the transit fees that ships have to pay when crossing the Suez Canal. On the other hand, it is also only logical that countries and governments look for alternatives to the Suez Canal.
Oil pipeline in Israel between the Red Sea and the Mediterranean Sea in advanced stage
Planned railway line between the Emirates and Haifa on the Mediterranean Sea would further reduce dependence on the Suez Canal
Being more independent from the Suez Canal: stability for the oil price?
Becoming independent of the Suez Canal is important for the oil price in exness thailand. After all, the oil price itself is comparatively volatile. An alternative to the Suez Canal via pipelines and railways would bring a little more stability to this region, at least as far as the transport of oil is concerned.
At the same time, however, it must be said that probably no other commodity is as politicised as crude oil. Therefore, it is very difficult to make a forecast for the oil price in general.
There has been a kind of battle between the USA and OPEC here for a long time. It is not only about the oil price itself, which is of immense importance for the OPEC countries and Russia, but also about the currency in which the oil price is quoted and settled.
The US dollar is still the dominant currency worldwide. This is expressed by the fact that all oil transactions worldwide are (or must be) settled in US dollars. Circumventing this "rule" would have dramatic consequences on the part of the USA. However, the planned projects in Israel would not be affected.