Turkish Unrest Threatens Oil Shipments From Key Israeli Partners

Turkey is more than just the second strongest NATO member besides the USA.  It is one of the world’s largest crude hubs.  With three pipelines running through the country and the Turkish straits made up of the Dardanelles, the Sea of Marmara, and the Bosphorus, millions of barrels of oil transverse Turkey daily.  

To get an idea about the effect of the failed coup had on oil prices, crude futures rose 1.5 percent on Friday as the news of the coup became public.  Oil prices have settled back down to $44 a barrel from $46 on the July 18th, but the continued counter-purge and growing friction between Erdogan and the other NATO members now cements and ongoing risk for oil shipping.

As of today, shipping has remained normal, but this can change quickly depending on how the events unfold.

“Any uncertainty in that region almost invariably results in an increase in oil prices, particularly given the interaction between what goes on in Turkey with Syria,” Craig Pirrong, director of the Global Energy Management Institute at the University of Houston’s Bauer College of Business, said Friday in a phone interview with GCaptain. “Analysts will be looking for whether there’s a “spillover to the major oil producers,” Pirrong continued.

Ceyhan is Key

Ceyhan, a city of 157 thousand in Southern Turkey is the terminus for three oil pipelines that run through Turkey.  It is also the destination point to and from the Turkish Straits for oil tankers. Although the unrest seems to be dying down, any future turmoil in Turkey or the border region with Syria has the potential of affecting this point.  If Erdogan goes after the Kurds in southern Turkey and Northern Syria, Ceyhan becomes the prime target of Kurdish counter attacks.

However, there is one thing that protects Ceyhan from potential Kurdish retaliatory attacks, and that is it too is being used by the Kurds of Iraq to ship their oil out below the radar by way of the Kirkuk-Ceyhan pipeline. One of the biggest recipients of Kurdish oil is none other than Israel, which is why Israel’s interest in renewed diplomatic relations with Turkey has become key to ensuring Kurdish oil flows to Israel.  

Kirkuk-Ceyhan Pipeline
Kirkuk-Ceyhan Pipeline

The Ceyhan-Iran Connection

Israel has gone out of its way to empower and build overt and covert relationships with regional players in order to block Iran’s drive westward.  The Kurds have always been a moderating and strong force in northern Iraq and have helped with degrading ISIS as well as helping to block Iran.  

Another regional partner of Israel is Azerbaijan.  The country is both a nemesis of Iran and sits on the strategic Caspian sea.  The Baku–Tbilisi–Ceyhan pipeline stretches 1,768 kilometres (1,099 mi) bringing oil from Azeri–Chirag–Gunashli in the Caspian sea to shipping routes in the Mediterranean Sea. The oil field produces 710,000 barrels a day.  Although it is lower than its peak of 810,000 daily barrels it is still vital for Azerbaijan.

Baku-Tliblisi-Ceyhan Pipeline
Baku-Tliblisi-Ceyhan Pipeline

Israel has a strategic interest in making sure Ceyhan is untouched and the free flow of oil from both of its allies reach their destination.

Is Israel Prepared for a New Lebanon War?

Yesterday marked ten years since the Second Lebanon War with Israel. The Foreign Affairs and Defense Committee of the Knesset marked the day with a debate on the lessons learned  from the war to see if the home front is prepared for a possible future conflict.

While the chief of staff for the IDF`s Home Front Command, Brig. Gen. Dedi Simchi, says of the 257 local authorities, 235 will be able to handle – with varying degrees of success – a future emergency situation, and that an “excellent culture of emergency has developed in the national home front,” several MK’s argued that a lot of work is needed to prepare for a future conflict.

MK Mordhay Yogev (Habayit Hayehudi) said the government must budget plans for fortification and the evacuation of civilians, if needed. “A war can – God forbid – leave us with thousands of people killed and damage to infrastructure to such an extent that we will have a hard time recuperating,” he stated. ”If we will not invest five billion shekels in fortification, we will sustain 50 billion shekel`s worth of damage.”

MK Eyal Ben-Reuven (Zionist Camp) said a conflict in the north ”is almost inevitable” but the region ”is not prepared for a war with 1,200-1,500 missiles falling daily.”

Committee Chairman Dichter lauded the Home Front Command for drawing the necessary conclusions immediately after the war, and said the issue of the local authorities` preparedness for a future conflict must be addressed.

”We must not leave question marks that will be exposed only in an emergency,” he said, adding that ”Hezbollah`s current [dire situation] gives us time to prepare the north, and this must guide us from an operational perspective.”

Considering the recent Hezbollah drone that penetrated Israel’s airspace in the Golan and talks in the Knesset of the dangers Israel faces from its neighbors, it is an opportune time for Israel to step up its security measures for the civilian population.

 

Is Washington Finally Getting Fed Up With Turkey?

What started out like a budding relationship between Obama and Erdogan, has now gone way beyond simple agitation.  The coup in Turkey may have put the final nail in the coffin for what was supposed to be an American backed drive to rule the Middle East.

Early in Obama’s tenure, he believed that Turkey could become the lynchpin to US policy in the region.  That was 7.5 years ago.  Today’s relation is fraying at the seams and with months to go before Obama’s departure, the tightening of Erdogan’s rule following the “coup” may push it over the cliff.

Erdogan has essentially used the failed coup to purge the government and country of non-loyal forces.  Although the USA supports a stable and strong Turkey, Erdogan using it as leverage to strike back at opponents is worrisome to the Obama administration. “We will certainly support bringing the perpetrators of the coup to justice, but we also caution against a reach that goes well beyond that,” Secretary of State John Kerry said on Monday. “We also firmly urge the government of Turkey to maintain calm and stability throughout the country, and we also urge the government of Turkey to uphold higher standards of respect for the nation’s democratic institutions and the rule of law.”

With Turkey getting the cold shoulder from the United States and of course near isolation by Russia, this puts it in a very difficult position with little or no wiggle room.  This is what makes Bibi’s continued acceptance of the Israel Turkish reconciliation deal so strange. Why would Israel want to throw Erdogan a life vest?

“Israel and Turkey recently agreed on a reconciliation process between them. We assume that this process will continue without any connection to the dramatic events in Turkey over the weekend.” Bibi Netanyahu said yesterday.

The question for Israel is, how long will it wait to jump onboard the anti-Erdogan bandwagon? Afterall, if Obama and Putin can agree on the need to corner Erdogan, it pays to pivot alongside them rather than being left the only one still committed to some irrelevant deal.

 

Hezbollah Drone Maybe a Harbringer for Renewed Fighting with Israel

The collective wisdom is that Hezbollah is too caught up with supporting the Assad government’s fight against ISIS to attack Israel, but Hezbollah’s penetration of Israel’s airspace in the Golan yesterday using a drone, may be an indication that things are about to change.

The IDF fired two Patriots at the drone and missed their target.  The drone made it back to its origin in Syria.  For Hezbollah, drones are a perfect form of both psychological warfare and reconnaissance. The important question is whether this is more of the same from Hezbollah or should Israel be prepared for renewed combat against Hezbollah.

In the last year the area West of the Golan has been the scene of warfare between Jihadist like Al-Nusra or ISIS and Hezbollah and Syrian Government Forces. There have been stray shells that penetrated the Golan and other incidents, but Hezbollah until recently has stayed focused on extraditing the Assad regime from the grips collapse.

The ramifications of renewed fighting between Hezbollah and Israel could be wide. The IDF will have to contend with Iranian troops as well as the Syrian army which is looking to raise morale. Fighting the “Zionists” is an excellent way to do that. The real unknown is Russia’s reaction.  Putin has taken a liking to Israel and wants it within his sphere of influence, yet is fully aware that he has supported Iran, Hezbollah, and Syria in their fight against ISIS.  At some point Putin will have to make a decision on which party to support for the long term. Renewed combat between Israel and Hezbollah will bring that decision to the forefront.

 

Israel is Moving Beyond Turkey

Israel, Greece, and Cyprus held a top level three way meeting on building a gas pipeline from Israel and Cyprus to Greece, for exporting gas to Europe.  This has been brewing for a while and the reports that we pushed forward previously have come to fruition, indicating that Israel is not waiting for Turkey to decide if they want to be part of the growing detente.

“Our partnership is not exclusive in design or nature, and we are ready to welcome other like-minded actors to join our efforts to promote coordination and cooperation, as well as regional peace and stability,” the three leaders said in a joint statement.

The above statement seems to leave the door open for Turkey at a later stage, but clearly at a reduced role.  The energy alliance is quickly growing into something far more concrete as  the three leaders talked about coordination on security, hi-tech, energy, and other important issues.

Israel-Greece-Cyprus

The alliance stands to quickly change the Eastern Mediterranean geopolitical reality, providing a sense of stability in a region engulfed by radical Islamic chaos. The burgeoning partnership is a testament to Israel’s increased standing in the World, despite the claims of isolation due to a lack of movement in the “peace process.”

Last month the Greek premiere Alexis Tsipras called Jerusalem, Israel’s historic capital, which many people saw as a sign that relations between the two countries were moving to a new level of cooperation.