Will Israel’s Oil Find Impact World Oil Prices?

It was back in March of this year that a suspicion of oil located in Israel’s Golan Heights was reported and flocks of onlookers dashed to the site to see it with their own eyes.

It took over a year of round-the-clock drilling but Israel announced Wednesday the discovery of enough oil to make the country self-sufficient for very many years to come.

According to Afek chief geologist Dr. Yuval Bartov, “We are talking about a strata which is 350 meters thick and what is important is the thickness and the porosity. On average in the world strata are 20-30 meters thick, so this is ten times as large as that, so we are talking about significant quantities. We are talking about significant quantities. The important thing is to know the oil is in the rock and that’s what we now know.”

The potential production is significant and could reach billions of barrels, more than the 270,000 barrels consumed by Israel on a daily basis. The surplus could create another energy industry in the country similar to its offshore Mediterranean gas discoveries that have put Israel on the map as a gas supplier. The advantage of the Golan oil is that it is closer to the center of the country and not kilometers out at sea where the gas lines are located.

We are talking about significant quantities. The important thing is to know the oil is in the rock and that’s what we now know.

The main oil drilling company, Afek, a subsidiary of American company Genie Energy, reported that the evidence of hydrocarbons found during the drilling in September heightened the possibility of finding liquid oil on the site. The results of the tests taken at the time matched the geological theory used by the company which stated that the large oil reservoir was formed by oil shale undergoing a rapid natural process.

Geopolitical and Economic Concerns

Despite the excitement over the discovery, geopolitical considerations do exist. Israel captured the Golan Heights from Syria in 1967 and annexed it in 1981. The move was never recognized by the international community, which still considers it as occupied territory.