The Eilat-Ashkelon Pipeline, a critical energy infrastructure traversing southern Israel, was originally constructed in 1968 as a clandestine 50/50 joint venture between the governments of Israel and Iran. This historical detail, highlighted by Matthew Yglesias in a recent tweet, underscores a period of strategic cooperation between the two nations before their diplomatic ties were severed. The pipeline was designed to transport crude oil from the Red Sea port of Eilat to the Mediterranean port of Ashkelon, providing a vital alternative route to the Suez Canal for Iranian oil destined for Europe.
The establishment of the Eilat-Ashkelon Pipeline Company (EAPC) in 1968 was a direct result of mutual strategic interests, particularly after the 1967 Six-Day War and the subsequent closure of the Suez Canal. At the time, Iran, under the rule of Shah Mohammad Reza Pahlavi, sought reliable export routes for its oil, while Israel aimed to secure its energy supply and establish itself as a transit hub. The venture operated under a strict secrecy decree, with shell companies established to mask Iran's involvement from the wider Muslim world.
However, this partnership dissolved following the 1979 Iranian Revolution, which led to the overthrow of the Shah and the severing of all relations between Iran and Israel. Israel subsequently nationalized the pipeline, integrating it fully into its national infrastructure. The abrupt end to the joint venture initiated decades of legal disputes, with Iran pursuing claims for compensation. In 2015, a Swiss court notably ordered Israel to pay Iran $1.1 billion in compensation related to the pipeline, a ruling Israel has refused to honor, citing its "Trading with the Enemy Act."
Today, the pipeline continues to operate under the Europe Asia Pipeline Company (EAPC), serving as a strategic asset for Israel. It has undergone significant upgrades, including a bidirectional flow project completed in 2003, allowing it to transport oil in either direction. More recently, in 2020, an agreement was reached to transport Emirati oil through the pipeline, further solidifying its role in regional energy logistics. The EAPC has also faced scrutiny over environmental incidents, such as the 2014 Evrona Nature Reserve oil spill, which led to significant clean-up efforts and legal proceedings.
