Iran vs Israel: Sworn enemies once operated secret oil joint venture

This led to a joint-venture between Israel and Iran in 1968 connecting the Red Sea port of Eilat and the Mediterranean port of Ashkelon. However, Iran and Israel shrouded their involvement via entities based in Liechtenstein and Panama, respectively.

But the 42-inch-wide and 254-km-long Eilat Ashkelon Pipeline did not evade detection. “Iran is the only likely source of substantial quantities of petroleum for the pipeline,” a declassified daily briefing dated April 25, 1968, given by the Central Intelligence Agency (CIA) to then US President Lyndon Johnson said. “This petroleum will probably go mainly to Eastern Europe. A fleet of supertankers will unload at the deep-water facilities at Eilat; smaller tankers will load at Ashkelon. This will probably be a less costly route than oil carried via the cape (Cape of Good Hope) or even through the (Suez) canal.”

Just like the pipeline’s ownership, the sale of oil that flowed through it was also a secret, as buyers were wary of purchasing oil from any entity linked to Israel lest it anger the Arab countries.

“At the Iranian end of the trade, tankers would load oil from Iran in the Persian Gulf and the crew would tell port authorities that they were heading to ‘Gibraltar, for order’,” journalists Javier Blas and Jack Farchy wrote in their 2021 book, The World for Sale. “But the tankers would never appear in Gibraltar. Instead, they would sail in secret to Eilat, unload their oil, and reappear empty in Iran.” Meanwhile, Israel imposed a “complete blackout on reporting information about any vessel picking up crude at its ports to supply European customers, effectively keeping the whole flow in the shadows.”

Israel nationalised the project after the Iranian Revolution in 1979.