Present (1998) United State government policy as it realtes to Tapline.

JORDAN

OIL

A comprehensive settlement of the Arab-Israeli conflict could affect Middle East oil flows significantly. Jordan's geographic location between the Arabian peninsula and the Mediterranean coastal states of Israel and Lebanon offers the potential for alternative oil export routes for Persian Gulf oil to the West. At present, these oil exports must travel either by ship (through the Suez Canal or around the horn of Africa), by pipeline from Iraq to Turkey (capacity 1-1.2 MMBD, currently closed), or via the Sumed (Suez-Mediterranean) Pipeline (capacity 2.4 MMBD).

Utilization of the Trans-Arabian Pipeline (Tapline) could offer another potentially economic alternative. The Tapline was originally constructed in the 1940s with a capacity of 500,000 b/d, and intended as the main means of exporting Saudi oil to the West (via Jordan to the port of Haifa, then part of Palestine, 0now a major Israeli port city). The establishment of the state of Israel resulted in diversion of the Tapline's terminal from Haifa to Sidon, Lebanon (through Syria and Lebanon).

Partly as a result of turmoil in Lebanon, and partly for economic reasons, oil exports via the Tapline were halted in 1975. In 1983, the Tapline's Lebanese section was closed altogether. Since then, the Tapline has been used exclusively to supply oil to Jordan, although Saudi Arabia terminated this arrangement to display displeasure with perceived Jordanian support for Iraq in the 1990/1 Gulf crisis.

Despite these problems, the Tapline remains an attractive export route for Persian Gulf oil exports to Europe and the United States. At least one analysis indicates that oil exports via the Tapline through Haifa to Europe would cost as much as 40 percent less than shipping by tanker through the Suez Canal. Recently, Bahrain, Kuwait, and Qatar have approached Israel regarding the possibility of using Israel as a transit center for oil shipments to Europe.

ISRAEL

OIL

A comprehensive settlement of the Arab-Israeli conflict could affect Middle East oil flows significantly. Israel's geographic location between the Arabian peninsula and the Mediterranean Sea offers the potential for an alternative oil export route for Persian Gulf oil to the West. At present, these oil exports must travel either by ship (through the Suez Canal or around the horn of Africa), by pipeline from Iraq to Turkey (capacity 1-1.2 MMBD), or via the Sumed (Suez-Mediterranean) Pipeline (capacity 2.5 MMBD).

Utilization of the Trans-Arabian Pipeline (Tapline) could offer another potentially economic alternative. The Tapline was originally constructed in the 1940s with a capacity of 500,000 bbl/d, and intended as the main means of exporting Saudi oil to the West (via Jordan to the port of Haifa, then part of Palestine, now a major Israeli port city). The establishment of the state of Israel resulted in diversion of the Tapline's terminus from Haifa to Sidon, Lebanon (through Syria and Lebanon).

Partly as a result of turmoil in Lebanon, and partly for economic reasons, oil exports via the Tapline were halted in 1975. In 1983, the Tapline's Lebanese section was closed altogether. Since then, the Tapline has been used exclusively to supply oil to Jordan, although Saudi Arabia terminated this arrangement to display displeasure with perceived Jordanian support for Iraq in the 1990/1 Gulf War. Despite these problems, the Tapline remains an attractive export route for Persian Gulf oil exports to Europe and the United States. At least one analysis indicates that oil exports via the Tapline through Haifa to Europe would cost as much as 40% less than shipping by tanker through the Suez Canal.