26 November 2014, News Wires – The US is in the midst of renewing its 35-year-old commitment to supply Israel with oil in emergency situations after the pact expired on Tuesday, according to reports.
The US “is in close contact with the government of Israel on extending the long-standing memorandum of understanding” between the two countries on emergency oil supplies, Reuters quoted a State Department official as saying on the condition of anonymity.
The agreement was first signed in 1979 by Secretary of State Cyrus Vance and Israeli Foreign Minister Moshe Dayan after the Iranian revolution sent shock waves of higher prices and fears about disruptions in the Middle East through oil markets.
Under the agreement, the US, provided it has enough oil for its own use, will provide Israel crude for purchase. If Israel is unable to secure transportation for the oil, Washington will make “every effort” to help Israel secure transit, according to the agreement.
The pact is an exception to Washington’s ban on crude oil exports that Congress passed after the Arab oil embargo of 1973 to 1974 spiked petroleum prices and led to fears of shortages. Israel has never asked the US to supply it with emergency oil.
Amid a six-year drilling boom that has led to a glut of light sweet crude along the US Gulf Coat refinery hub, the Obama administration has been pressured by oil companies to relax or lift trade restrictions.