Saudi Arabia Boosts Pipeline Capacity to Avoid Hormuz Strait

By Abdelghani Henni 9 Jul 2014

Saudi Arabia has increased the capacity of its east-west pipeline to 5 million B/D, in an attempt to avoid the Strait of Hormuz in the Arabian Gulf and ensure the free flow of oil to international markets in the event that Iran follows through with its threatened closure of the Strait, local media reported.

The 1200 km pipeline links the eastern region of the Kingdom, where the majority of the oil is being produced, with the export facilities on the Red Sea on the western coast of the Kingdom. Local media said it will run at maximum capacity when needed. 

Major oil producers in the Arabian Peninsula are working on finding alternative routes to increase the security of supply and reduce oil transportation through the Strait of Hormuz. 

In June 2012, Abu Dhabi Crude Oil Pipeline inaugurated a 370 km pipeline, capable of carrying 1.8 million B/D, which connects Abu Dhabi’s onshore fields to the exports terminal in Fujairah, the only Emirate located on the Gulf of Oman in the country’s east instead of on the Persian Gulf.

The Habshan-Fujairah pipeline is a crucial hedge for Abu Dhabi against security threats posed by Iranian posturing in the Strait of Hormuz, and it offers international oil tankers around a week’s saved transit time over Abu Dhabi’s current export terminal at Jebel Dhanna.

The Strait of Hormuz is the only sea passage from the Persian Gulf to the open ocean and is one of the world's most strategically important choke points. On the north coast is Iran, and on the south coast is the United Arab Emirates and Musandam, an exclave of Oman. At its narrowest, the strait is 21 nautical miles (39 km) wide.

About 20% of the world’s petroleum, and about 35% of the petroleum traded by sea, passes through the strait, making it a highly important strategic location for international trade. Last year, Saudi Arabia exported 8.45 million B/D through the Strait of Hormuz, UAE exported 2.89 million B/D, Kuwait sent 2.63 million B/D, and Iraq exported 2.39 million B/D through the strait.

Abdelghani Henni is the Middle East Editor for the Journal of Petroleum Technology.