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Israel-UAE oil deal cancellation could lead to severing ties

Israeli Environmental Protection Minister Tamar Zandberg arrives for a photo at the President's residence during a ceremony for the new coalition government in Jerusalem, on June 14, 2021. [EMMANUEL DUNAND/AFP via Getty Images]
Israeli Environmental Protection Minister Tamar Zandberg arrives for a photo at the President's residence during a ceremony for the new coalition government in Jerusalem, on June 14, 2021. [EMMANUEL DUNAND/AFP via Getty Images]

A decision by Israel's Environmental Protection Minister, Tamar Zandberg, to freeze a major oil deal with the UAE to Israel might lead to ties between the two countries being severed, UAE officials have warned. The deal to develop the Eilat-Ashkelon oil pipeline would enable UAE oil tankers to unload in Eilat from where oil would be pumped to the Mediterranean port and on to its destination. The route would bypass Egypt's Suez Canal.

"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," explained historian Professor Yoram Meital to Media Line. "The deal was dubious when it was signed and is much more controversial today, and this is the background to the freeze."

Speaking to Israel Hayom, UAE officials pointed out that the agreement was signed after all necessary tests were carried out. "Its annulment could certainly lead to an erosion of the ties being formed with the Israeli government and commercial interests," they warned.

With the potential for hundreds of billions of dollars of business if implemented, Meital does not believe that freezing the deal will result in a lasting diplomatic crisis. "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."

An international relations expert at the Hebrew University told Media Line that it has not been frozen permanently. "We are conveying to the officials in the UAE that we have a new government, we have a new Minister of Environmental Affairs and we have new policies," said Yonatan Freeman. "In the end, both parties see great benefit from such an agreement and right now it's more about internal politics rather than an actual change in policy."

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