Bypassing The Worlds Key Oil Chokepoints

The suspension of oil shipments through the strait of Bab el-Mandeb this week by Saudi Arabia, coming shortly after a threat by Iran to shut the strait of Hormuz, raised a lot of questions about the vulnerability of the oil trade to just a handful of chokepoints around the world. But what are countries and oil producers doing to alleviate that risk?

In a previous article, I detailed the top 4 chokepoints that pose a risk to oil supplies. Lets look now at some of the projects and schemes intended to work around those chokepoints.

Strait of Hormuz

Nearly a fifth of the oil trade, or nearly 19 million barrels per day (mb/d) of crude oil, passes through the Strait of Hormuz, combined with nearly a third of global LNG supplies.

Saudi Arabia and the UAE each have pipelines that have the capability to ship oil outside of the Persian Gulf, circumventing the Strait of Hormuz, but by and large these options are operating way below capacity.

Saudi Arabia has the nearly 750-mile Petroline (or East-West Pipeline), which runs across Saudi Arabia from the oil fields in the East to the Red Sea in the West at the Yanbu port. (The old Trans-Arabian Line, which ran from Saudi Arabia to Lebanon, has been out of service for decades).

(Click to enlarge)Through the Petroline system, some Saudi oil can avoid having to pass through the Strait of Hormuz (or Bab el-Mandeb for that matter), linking up with tankers in the Red Sea and from there towards the Suez Canal and the Mediterranean.

The pipeline system, ....

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