Israel and U.S. renewing emergency oil supply agreement

Fuel barrels. Credit: Wikimedia Commons.

( The U.S. is renewing its commitment to supply oil to Israel in emergency situations. The agreement, which has existed for 35 years, had expired this week, according to a State Department official.

The United States "is in close contact with the government of Israel on extending the long-standing memorandum of understanding" between the U.S. and Israel on the issue of emergency oil supplies, the anonymous official said, Reuters reported. 

The original agreement was signed in 1979 by U.S. Secretary of State Cyrus Vance and Israeli Foreign Minister Moshe Dayan in the wake of the Iranian revolution, which caused oil prices to rise and created anxiety about supply disruption in the Middle East. After first making sure it has enough of its own oil supply during an emergency, the U.S. is committed to provide Israel with crude oil for purchase and to make "every effort" to help transport the oil when needed. 

The agreement with Israel exists as an exception to the U.S. ban on crude oil exports in response to the Arab oil embargo of 1973 to 1974, which had raised oil prices and caused shortage fears. But as of yet, Israel has never had to rely on the agreement to get emergency oil from the U.S.

Posted on November 26, 2014 .