Bazan Chairman Warns Investing in Israel Amid Uncertainty Is Irresponsible to Investors
Moshe Kaplinsky, chairman of Bazan, Israel's largest oil refinery, stated that despite having numerous development plans for the refinery, the company intends to direct its next investment abroad due to domestic uncertainty. Speaking to Calcalist following the release of Bazan's financial results, Kaplinsky criticized government plans to shut down Bazan by the early 2030s and rely on imported fuels, calling such uncertainty irresponsible to investors. He noted that this uncertainty has already led to shelving a 400-megawatt power plant project within Bazan's complex and other investments totaling several hundred million shekels.
Bazan CEO Rafael Maman echoed these concerns, saying that without government restrictions, the company would have pursued significant expansions to increase refining capacity. The government's decision, led by Prime Minister Netanyahu's economic advisor Professor Avi Simhon, aims to close Bazan by the end of 2029, though recent estimates suggest the shutdown may be delayed until 2030 or later. Energy Minister Eli Cohen has proposed relocating Bazan's operations to southern Israel, a move expected to take years and cost billions.
Kaplinsky emphasized Israel's strategic need for domestic refining capacity, warning that reliance on imported fuels risks shortages amid global supply constraints. He highlighted that Europe faces severe fuel shortages this winter, while Israel's refining capabilities shield it from similar crises. Bazan reported a sharp profit increase in Q2 2026, with refining margins rising to $17.9 per barrel from $10.5 the previous year, driven by geopolitical tensions in the Middle East and Eastern Europe.
The ongoing conflicts in Iran and Ukraine have disrupted global oil supplies, with Iran's attacks on Gulf energy infrastructure and Russia's export restrictions exacerbating shortages. Maman described global refined product inventories as historically low amid high demand, noting that new refinery construction in the West is too slow to meet consumption needs. Bazan posted a net profit of $263 million in Q2 2026, reversing a $37 million loss a year earlier, and its adjusted EBITDA surged to $317 million from $75 million. The company also recognized $71 million in insurance income related to missile damage during the June 2025 Iran conflict.
In light of these results, Bazan's board approved a $120 million dividend payout. Kaplinsky expressed confidence that the global environment will continue to support Bazan's strong business performance throughout the year.
