Trouble in paradise? Israel freezes oil deal with UAE over environmental concerns

The Israeli Environmental Protection Ministry announced on Sunday that it would be delaying the launch of a controversial oil transport deal with the United Arab Emirates. 

Needless to say, the Emiratis are not happy with what they perceive as Israeli foot-dragging concerning the bilateral agreement. 

According to the deal, which has been criticized by environmentalists, oil would be transported from the Persian Gulf to a terminal in Israel’s Red Sea port city Eilat. From there, the oil would be funneled via an old overland pipeline through the Israeli city of Ashkelon on the Mediterranean Sea to be shipped to large markets in Europe. 

The frozen oil deal constitutes the first serious challenge to the peace agreement between Israel and the UAE, which became a blueprint for the expanding multinational Abraham Accords in 2020. 

Does this diplomatic and commercial setback mean there is trouble in the recently established Israel-UAE peace paradise? 

The controversial oil deal is at the center of conflicting interests between diplomacy, commerce and environment. While financially profitable for both the UAE and Israel, many scientists and environmentalists argue that transporting oil to Eilat would devastate its world-renowned coral reef eco system and wider marine life. 

Professor Yoram Meital, a modern Middle East historian and director of Ben-Gurion University’s Chaim Herzog Center for Middle East Studies and Diplomacy, believes that the frozen oil deal does indeed constitute the first serious challenge to the Abraham Accords. 

“It is serious because we have a deal that is now frozen by one side – the Israeli side – but at the same time I think that the Emiratis do understand that this is a new government with totally different policy lines,” Meital said in an interview with The Media Line. 

In addition, Meital criticized the oil deal, which he claims, “was dubious when it was signed and is much more controversial today, and this is the background of the freeze.” 

Despite the potential commercial setback, Meital does not believe it will escalate into a serious diplomatic crisis between Jerusalem and Abu Dhabi. 

“It’s too early to say if it will lead to serious tension or a crisis, but I don’t think so. No one would like to risk the peace treaty itself,” Meital said. 

Dr. Nimrod Goren, president and founder of Mitvim, the Israeli Institute for Regional Foreign Policies, shares Meital’s cautiously optimistic sentiment. In an interview with The Media Line, Goren stressed that the Israeli government is fully committed to the peace agreement with the UAE. 

“The government wants to deepen this relationship. The government is evaluating the way that [former Israeli Prime Minister Benjamin] Netanyahu handled ties and wants to fix whatever it finds needs amendment. The way that UAE relations will be handled under this new government will not be identical to the way that Netanyahu did,” Goren said. 

Meanwhile, it was recently revealed that Amir Hayek, Israel’s new ambassador to the UAE, previously called the oil deal with Abu Dhabi a “security danger” and “ecological danger.” In addition, Hayek reportedly also mocked the U.S. planned sale of advanced F35 fighter jets to the UAE. 

However, the overall picture of bilateral relations between the UAE and Israel has been positive and the relations have developed rapidly since the peace agreement was signed in September 2020. Emirati and Israeli airlines operate direct flights several times a week between the two nations.

In late June, Israeli Foreign Minister Yair Lapid officially inaugurated Israel’s embassy in Abu Dhabi. Lapid became the first senior Israeli minister to officially visit the Gulf state. Earlier in July, the UAE opened its embassy in Tel Aviv. UAE’s first ambassador to Israel, Mohamed al-Khaja, and Israel’s President Isaac Herzog attended the high-profile opening ceremony.