INTERNATIONAL: Hormuz Closure? Gulf Oil Has Alternatives
Potential Strait Disruption
Amid escalating tensions in the Iran-Israel conflict, Iran has signaled it may close the Strait of Hormuz, a critical artery for global petroleum and gas trade. Such a closure could disrupt up to 20% of the world’s oil supply, prompting concerns about energy market stability. Experts, however, highlight viable alternative routes to mitigate potential impacts.
Saudi Arabia’s Pipeline Solution
Saudi Arabia’s East-West Pipeline, spanning 1,200 kilometers, connects its eastern oil fields to the Red Sea port of Yanbu. This infrastructure enables oil exports to Europe and the Americas, bypassing the strait entirely. The pipeline’s capacity, temporarily expanded to 7 million barrels per day in 2019, offers significant relief in a crisis.
UAE’s Strategic Bypass
The United Arab Emirates operates the 250-mile Abu Dhabi-Fujairah pipeline, linking its oil fields to the Arabian Sea port of Fujairah. This route facilitates exports to Asia, particularly Oman, without navigating the Strait. While capacity is limited compared to Saudi Arabia’s, it remains a critical alternative for regional trade.
Iraq’s Kirkuk-Ceyhan Route
Iraq’s Kirkuk-Ceyhan pipeline connects its northern oil fields to Turkey’s Mediterranean port of Ceyhan. Though requiring maintenance in some sections, this pipeline could supply oil to Western markets via Turkey. Its reactivation would bolster export options in the event of a Hormuz closure.
Protected Tanker Routes
Oil tankers could continue traversing the strait under U.S. and allied naval protection, a strategy employed during past regional tensions. This route is vital for China, which relies on Gulf oil for over 40% of its imports. Analysts suggest Iran may avoid antagonizing Beijing, its key ally, limiting the likelihood of a full closure.
Iran’s Own Bypass
Iran has developed the Goreh-Jask pipeline, enabling oil exports from the Gulf of Oman, circumventing the Strait. This infrastructure underscores the region’s growing investment in alternative pathways. However, its capacity remains modest compared to the strait’s daily throughput of 21 million barrels.
Global Energy Resilience
While a strait closure would spike oil prices and strain markets, these pipelines offer partial mitigation. Combined, Saudi Arabia, the UAE, and Iraq’s bypass routes could sustain significant exports, though not fully replacing the strait’s volume. Naval escorts and Iran’s strategic calculations further reduce the risk of prolonged disruption.