Israel's Energy Resilience Amid Conflict

Despite ongoing turmoil in the oil market and Iran's effective closure of the Strait of Hormuz, Israel is currently not facing shortages of crude oil or petroleum products. Amit Mor, CEO of Eco Energy and a senior lecturer at Reichman University, confirmed that Israel maintains robust strategic and commercial reserves, in line with International Energy Agency (IEA) recommendations to store at least three months' worth of fuel. However, consumers are expected to experience rising gasoline prices, with predictions indicating an increase of NIS 1 per liter ($1.21 per gallon) next month. In response to this anticipated rise, the Finance Ministry is considering a fuel tax reduction of NIS 0.5 per liter to prevent prices from exceeding NIS 8 per liter ($9.69 per gallon), a measure aimed at mitigating inflation.

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Since the initiation of joint US-Israeli strikes on the Iranian regime on February 28, oil tanker activity near Israel has significantly decreased. Data from the Marine Traffic shipping site indicates minimal movement near the ports of Haifa, Ashdod, and Ashkelon. The Europe Asia Pipeline Company terminal in Eilat has also seen reduced activity following Houthi attacks in Yemen during the Gaza conflict. The Bazan refinery in Haifa, which suffered minor damage from missile-interception fragments, has reported that its infrastructure is restarting, with expected losses deemed negligible.

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The energy demands of the ongoing conflict are substantial. A single fighter jet's round-trip flight to Iran consumes between 12,000 to 24,000 liters (3,170 to 6,340 gallons) of jet fuel, which is equivalent to one or two decades' worth of fuel consumption for an average automobile driver. With two of three natural gas platforms temporarily halted, power plants have shifted to using diesel and coal, which are significantly more expensive and environmentally damaging. Diesel costs are reported to be 20 times higher than natural gas, while coal prices are double or triple.

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Experts are beginning to assess the long-term implications of the current conflict on Israel's energy strategy. Prof. Yigal Newman from Hebrew University noted that while Israel's daily consumption of 200,000 barrels is a small fraction of the global market's 100 million barrels, a prolonged conflict could lead to much steeper price hikes. Mor emphasized the importance of energy decentralization as a key lesson from the war, advocating for a shift towards solar power. This transition could enable Israel to develop a system of tens of thousands of individual energy producers, thereby reducing vulnerability to attacks on the national grid.

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The Energy Ministry and grid operator NOGA have refrained from providing specific supply details due to wartime restrictions, highlighting the complexities of managing energy resources during conflict.

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While the current energy reserves are deemed sufficient, critics argue that reliance on fossil fuels and the shift to more expensive energy sources during the conflict could exacerbate economic pressures on consumers and increase environmental risks.

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• “Mor concludes that the ultimate lesson of the war is the need for energy decentralization.” — Amit Mor, CEO of Eco Energy

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