OPEC, and especially Saudi Arabia, have worked the asian oil market hard, creating an "Asia premium" on oil prices that has ranged as high as $3/bl. This has meant extra billions in OPEC coffers with oil consuming businesses in Asia paying the price. Stratfor in their e-mailed intelligence brief has noted that Israel's TIPLine oil pipeline has recently finished some modifications that spell the end of the Asia premium. Russia is constrained by Turkey's (possibly illegal according to the WW I settlements) Bosphorus tanker regulations to shipping oil in small tankers that simply are uneconomic to use beyond local transport. Israel falls within the practical Russian tanker zone so now oil can be unloaded on Israel's Meditteranean coast in smaller Russian tankers, transshipped via the TIPLine and reloaded into conventional long-haul supertankers in the Red Sea at the port of Eilat for further shipment to Asia.
Stratfor's story seems to be for subscribers only but a cut and paste of the article is available, unfortunately without attribution. Naughty Evgeny.
Posted by TMLutas at July 18, 2003 09:16 AM