New Report Advises Israel Against Closing Oil Refining Capacity
A new report commissioned by Israel's Ministry of Energy and the Oil Authority recommends against closing the country's oil refining capacities, reversing earlier suggestions from 2017. The report, prepared by BDO, argues that maintaining domestic refining facilities provides Israel with greater flexibility than relying solely on imported refined products.
Key concerns highlighted include potential disruptions to shipping and imports during military conflicts, such as difficulties with docking foreign vessels, security-related navigation restrictions, and supply interruptions from exporting nations. The report also notes that certain fuels, like aviation kerosene, diesel for power stations, and high-octane gasoline, have specific technical requirements or low market liquidity, making them harder to procure quickly from abroad.
Furthermore, the report acknowledges risks to refineries and natural gas extraction. In such scenarios, power plants might need to switch to diesel for extended periods, while the fuel system would simultaneously need to supply transportation, industry, security forces, and civil defense.
Local refineries, the report states, can produce a diverse range of products tailored to economic needs and adjust output when specific supplies are disrupted. The authors recommend preserving domestic refining capabilities, significantly increasing strategic fuel reserves, and enhancing connectivity between ports, storage facilities, and pipeline systems.
As a potential solution, the report suggests relocating the Haifa refinery to the Negev region, transforming it into a hybrid facility capable of processing future fuels, including sustainable aviation fuel and biodiesel.
