Gulf nations are accelerating their plans to bypass the Strait of Hormuz with new oil pipelines, in a move that could redirect a majority of the oil in the region.
The Associated Press reported on Thursday, “At least seven major pipeline projects are under construction, in the planning stage or being discussed as possibilities, according to government officials, oil companies and analysts. The war has been a wake-up call for Gulf oil producers, who are determined to become less dependent on a transit point that hugs Iran’s coast.”
The pipelines, being built at a cost of billions of dollars, will redirect millions of barrels of oil to ports on the Red Sea, the Gulf of Oman and the Mediterranean. They are expected to be operational by 2027.
Before the war, roughly 15 million barrels of oil a day passed through the Strait of Hormuz.
Although alternative routes present their own difficulties—Yemen’s Houthi rebels have attacked at least two tankers in the Red Sea in recent days—producers in the region have realised that relying on the Strait of Hormuz is “no longer a prudent long-term strategy,” said Victoria Grabenwöger, senior research analyst at data firm Kpler.
Pipelines remain vulnerable to drone and missile attacks.
AP notes that the “effective shutdown of the Strait of Hormuz would have been an even greater shock to the world economy were it not for a pipeline Saudi Arabia built in the 1980s amid fears that Tehran would disrupt shipping through the strait during the Iran-Iraq war.”
The Saudi pipeline and a pipeline in the United Arab Emirates that reaches the Gulf of Oman have together been carrying more than 5.5 million extra barrels of oil since the war began.
Analysis by Goldman Sachs suggests that, by 2028, the new pipelines under construction could carry up to 60% of the region’s pre-war exports of 23 million barrels a day.
The pipelines will not alleviate potential disruption to shipments of liquified natural gas (LNG), which is carried by ship. About 20% of the world’s LNG—mostly from Qatar—passed through the Strait of Hormuz before the war began.
One Response
Where the hell are the pipelines for the USA?
WHAT HAPPENED TO THAT?
Trump would rather line the pockets of his foreign investors and screw the American taxpayers.
Trump has made us more dependent upon the mooslum oil producing state regions.
He sucks ass at foreign policies.
He is becoming nothing but a well ridden cheap to purchase whore.