Article by Levina

There is a method to the madness in Hamas’s attacks in Israel. Both Hamas & Houthis are targeting parts of Israel which has a secret pipeline running through it. The pipeline’s secrets were spilled to the world for the first time in 2014 when there was a rupture in the pipeline that caused the worst environment disaster in Israel’s history.

Iran, Qatar, Russia, China would be jubilant to see this pipeline and the Israel’s Eilat project associated with it destroyed, as revival of this pipeline is a threat to their business.

The current situation is akin to the popular folklore where a Giant hid his heart in a parrot.  Kill the parrot and the Giant dies. Curiously, a parallel can be drawn to the colossal trade corridors that nations are currently constructing worldwide. These vital arteries of commerce bear immense strategic importance. Destroy the corridor and the country will be emasculated.

The importance of these trade corridors extends beyond economic vitality; they often serve as the linchpins of future conflicts… and sometimes war. Historical examples, such as the Soviet-Afghan conflict, the longstanding rivalry between Azerbaijan and Armenia, and the ongoing tensions between Russia and Ukraine, and Israel- Hamas war, all transpired along corridors of exceptional significance. Most of these corridors crisscross the 7 choke points across the globe.

 Understanding war and conflicts requires going beyond the surface-level perception of mere parties at odds. In the eyes of military strategists and geopolitical analysts, it is the fusion of geography and vested business interests that frequently ignites the flames of war.

The world of international intrigue and geopolitics is rife with stories that often remain concealed beneath the surface, waiting to be unveiled.

Secret Pipeline & Eilat project

Amidst the ongoing Israel-Hamas conflict, the names Eilat and Ashkelon have gained prominence. Whilst Houthis are targeting Southern tip of Israel in Eilat, Hamas has been targeting Ashkelon in the north. There is a strategy behind this attack.

To the uninitiated, these places might appear as mere geographic locations with little significance. After the Suez Canal block in 2021, Israel decided to revamp Eilat with a deep-water port and huge logistics warehouses, which will be connected to central Israel by railway. This railway will later also connect Saudi Arabia to Eilat city in Israel. In 2021, nobody believed Israel and Saudi could achieve peace, but Governments clearly had a long-term plan.

 Eilat and Ashkelon also have historical importance, particularly in the context of a project known as the Eilat Ashkelon Pipeline Co. (EAPC), dating back to the 1960s. This pipeline, jointly established by Israel and Iran, played a pivotal role in facilitating the transportation of oil from Iran to Europe. Iranian ships bound for Europe would deliver oil to Eilat, located at the southernmost tip of Israel, along the Red Sea. From there, the oil was piped to Ashkelon, a city located on the Mediterranean coast, approximately 5 Km north of the tip of northern Gaza. The pipeline’s route traversed the Sinai Peninsula, which is 200 kilometers wide, effectively separating it from Egypt’s Suez Canal.

However, this collaboration came to an end with the Iranian Revolution in 1979, which drastically altered the dynamics between Israel and Iran. Following the revolution, Iran and Israel became staunch adversaries. Yet, for a brief period after the revolution, Israel discreetly allowed Iranian oil to flow through the pipeline.

EAPC had briefly managed to grab some eyeballs when a rupture in the pipeline caused the worst environmental crisis in Israel in 2014. The EAPC pipeline faded into relative obscurity again until the signing of the Abraham Accords involving the United Arab Emirates, Israel, and Bahrain in 2021.  Subsequently, discussions emerged between Israel and the UAE regarding the EAPC oil pipeline, which connects the Red Sea to the Mediterranean. Notably, Israeli officials have maintained a high level of secrecy regarding the operations of this pipeline.

But why is it a secret?

The operations of this company have consistently remained one of Israel’s best-kept secrets, shrouded in a veil of confidentiality. Even today, EAPC maintains a stringent policy of not disclosing any financial statements.

EAPC has an impressive capacity of 600,000 barrels per day and a huge storage space capable of accommodating nearly 23 million barrels. Now compare this to its neighbour Suez Canal; a significant portion of the oil transported from the Gulf to Europe traverses either through the Suez Canal or Egypt’s Sumed pipeline, with a daily capacity of 2.5 million barrels. Sumed pipeline’s capacity is about 1/10th of EAPC’s extensive capabilities.

One of the standout features of EAPC lies in its ability to handle massive supertankers known as VLCCs (Very Large Crude Carriers), capable of transporting up to 2 million barrels of petroleum. Au contraire, the Suez Canal, constructed over 150 years ago, grapples with limitations tied to its depth and width, restricting it to accommodating vessels known as Suezmax, with only half the capacity of a VLCC. Consequently, oil traders who traditionally charter two ships through the Suez Canal will have to pay for a single VLCC ship they send through Israel. With one-way fees through the Suez soaring to an estimated $300,000 to $400,000, the EAPC pipeline can afford to provide its customers with a substantial cost advantage.

Till not so long ago, ships docking at Ashkelon (Northern Israel) were prohibited from accessing GCC ports, prompting EAPC’s customer shipping companies to employ elaborate tactics, including multiple registrations and other stratagems, to conceal their identities. This is one reason why Israel never shared too many details about EAPC, that would have hurt it’s customers.

This convoluted web of secrecy surrounding EAPC can be attributed to one more factor, which is– Israel sharing its profits with Iran. In 2015, a Swiss court ruled that Israel was obligated to pay Iran approximately $1.1 billion as a share of the profits stemming from their joint ownership of the EAPC pipeline. However, Israel declined to comply with this compensation ruling. The reason for Israel’s resistance is not difficult to comprehend. Present Iranian regime has refused to cooperate with Israel, peace and profit sharing can not be expected at least in near future.

Corridors and multiple players

In the complex web of global geopolitics, there exist seven pivotal geographical maritime choke points that play a vital role in shaping the world’s strategic landscape. These choke points, often narrow passages, serve as critical connectors between larger regions and are typically characterized as straits or canals through which substantial volumes of maritime traffic flow. It is worth noting that three of these crucial choke points are nestled within the Middle East, adding a layer of complexity to the region’s perennial challenges. This explains why the Middle East has witnessed perpetual turmoil.

The Middle East’s intricate geopolitical dynamics become clearer when one takes a closer look at its geographical layout. The trio of choke points in the Middle East, namely the Suez Canal, Bab Al Mandeb, and the Strait of Hormuz, serve as linchpins in the international supply chain and the maritime transportation of goods. Two of these choke points lie right next to Israel and one slightly away, near UAE.

Suez-canal: On average, 50 vessels pass through the Suez Canal every day.

Bab Al Mandeb:  About 47 ships cross this strait every day.

Strait of Hormuz: Every day approximately a fifth of the volume of the world’s total oil consumption passes through the Strait of Hormuz.

Remarkably, even in this era of technological advancements, approximately 80 percent of global trade continues to rely on maritime shipping routes. This fact adds to the significance of the choke points listed above.

Notwithstanding the disruption in the Suez Canal in 2020, Egypt’s Suez Canal Economic Zone accomplished a behemoth agreement in October, amounting to a staggering $6.75 billion, with China Energy. Simultaneously, Qatar has pledged a substantial $5 billion investment in the Egyptian economy. It’s worth highlighting that Egypt has rarely witnessed such substantial foreign investments in its recent history.

In the event of any unforeseen complications or setbacks in the operation of the Suez Canal, China and Qatar would bear the brunt of the repercussions, without an iota of doubt. Loss of business in the Suez Canal will hurt both these countries.

In recent decades, Egypt and Israel have cultivated a noteworthy level of cooperation, with significant consequences for the region’s geopolitics. The activation of the Eastern Mediterranean Pipeline Company (EAPC) to its full operational capacity will jeopardise this partnership. This endeavor is not without controversy, as it is poised to siphon off a substantial portion, estimated at 10-12%, of Egypt’s lucrative business conducted through the Suez Canal. The potential ramifications extend beyond Egypt’s borders, raising concerns for third-party stakeholders, including China and Qatar, who have vested interests in the Suez Canal.

The situation is further complicated by Israel’s need to navigate this challenge without sacrificing this delicate diplomatic tie with Egypt, its neighboring nation, at the altar of trade. This demands a delicate balancing act on Israel’s part, as it seeks to maintain regional stability and secure its energy security.

EAPC has a unique capacity to transport oil unloaded in Ashkelon from ships dispatched by producers, such as Azerbaijan and Kazakhstan, to tankers stationed in the Gulf of Aqaba. These tankers are destined for far-reaching destinations, including China, South Korea, and various other regions within Asia. The significance of this dynamic lies not only in the energy trade but also in its geopolitical implications.

Azerbaijan, in particular, stands out due to its multifaceted relationship with Israel, encompassing both trade and military cooperation. This bond, while strategically beneficial, complicates the geopolitical landscape in the region. In contrast, Azerbaijan’s historical rival, Armenia, enjoys the support of Iran, primarily stemming from their long-standing bonds and trade relations.

Both Armenia & Azerbaijan play pivotal roles in the International North-South Transport Corridor (INSTC), which links Russia to Iran via Azerbaijan, extending to India, facilitating the transportation of goods to other parts of Asia. It is essential to underscore that while Russia is the most sanctioned country in the world and Iran fares slightly better vis-à-vis sanctions, making the preservation of the INSTC of paramount importance for them. They are unlikely to entertain any potential competitors that could challenge their business through this strategic corridor.

In the backdrop of these intricate geopolitical developments, we observe the emergence of the Indian Middle East to Europe Corridor (IMEC). This corridor fosters trade and connectivity between India, the Middle East, and Europe. Notably, the Middle East segment in this equation is largely limited to key players such as Israel, the United Arab Emirates (UAE), and Saudi Arabia. IMEC is poised to become a strategic rival to INSTC, further heightening regional tensions.

This geopolitical chessboard underlines how conflicts such as Azerbaijan and Armenia, reverberate across continents, and are connected to Israel Hamas war. The ongoing Israel-Hamas conflict in the Middle East is emblematic of the intricate interplay between regional tensions and global geopolitics, where every move carries consequences that ripple through the intricate fabric of international relations.

The final goal?

In the present scenario Iran’s potential to disrupt the Eilat and Ashkelon pipeline casts a looming shadow. If Iran manages to hurt Eilat and Ashkelon pipeline, it will be able to avenge its loss of business through EAPC thereby exacerbating the challenges faced by key players, including Israel, the United Arab Emirates (UAE), and Saudi Arabia.

Simultaneously, the Israel-Hamas conflict has managed to stretch the United States thin, with a significant concentration of its naval assets in the CENTCOM (Central Command) region, which encompasses the Middle East. This strategic realignment compels the United States to prioritize its support for Israel over other global concerns, notably Ukraine. This shift in focus aligns with Russia’s interests, allowing it to capitalize on the situation.

In this chaos, there are two relatively silent yet influential actors, namely Qatar and China, who are poised for significant repercussions. Their substantial investments in the Suez Canal stand to be adversely affected if the EAPC attains its maximum operational capacity. The economic implications of this disruption could reverberate across multiple industries and further intensify the ongoing geopolitical dynamics.

Israel- Hamas war by media narrative has been turned into a civilizational conflict. But is it? It is business interests that each player is attempting to safeguard. This is a war of corridors!