UAE plans Ethiopia – Eritrea Pipeline

23 September 2018

Lab Chat

Eritrea with the construction of an onshore crude oil pipeline between the two countries. The ambitious new project was outlined in an announcement last month, as the UAE continues its role as peacemaker between the neighbouring African nations.

The situation in the region had been volatile for well over 50 years until a momentous peace treaty was signed this July. Building upon that breakthrough, the UAE plans to offer Ethiopia an export outlet on the Red Sea via the Eritrean port of Assab, which will prove to be beneficial for all involved parties.

An acrimonious history

Following a 30-year-long struggle for independence, Eritrea finally broke away from Ethiopia in 1993. However, several further years of skirmishes over border delineations led to the outbreak of the Ethiopian-Eritrean War in 1998. The conflict lasted for over two years and caused the deaths of around 100,000 people on both sides, with much of Eritrea being occupied by Ethiopian forces for decades after the signing of the Algiers Agreement in 2000.

Although outright warfare had been sidelined, the two nations still suffered from frosty relations until this year, when new Ethiopian Prime Minister Abiy Ahmed promised to bring the conflict to a close. He met his Eritrean presidential counterpart Isaias Afwerki in July in Asmara, where the pair signed a landmark peace deal. The UAE has welcomed their reconciliation as beneficial to the future prosperity of the entire region and awarded leaders of both countries laurels for their efforts.

Forging a new future

The construction of the pipeline is a key facet in cementing and strengthening the bonds between the two countries. Earlier this year, Ethiopia began extracting crude oil from its southeastern region on a trial basis. However, as a landlocked nation, Ethiopia needs access through one of its neighbours to export globally. Historically, the country had used the Eritrean port of Assab to do so, but the deterioration of inter-relations made this unfeasible in recent times.

However, the new peace accord means that Assab is once more an attractive proposition for Ethiopian exports. Having already extended $1 billion to Ethiopia in

July to deal with a mounting economic crisis, the UAE is now looking to further offer support in the form of the construction of the pipeline.

The deal will also bolster fuel security in the entire Middle East and North Africa (MENA) region, which has sometimes suffered from shocks to the market. For example, a pipeline outage almost halved Iraqi oil exports in 2016, having a knock-on effect on the surrounding nations. The new pipeline should eliminate such problems in the future, as well as allowing the UAE access to the lucrative investment opportunities in the Horn of Africa.

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