Gulf governments are planning to build oil pipelines that will bypass the world’s most vulnerable energy choke point, the Strait of Hormuz, aiming to avoid possible Iranian threats to global oil shipments.
Around two-fifths of the world’s traded oil is shipped by tanker through the Hormuz Strait. But the 54km wide passage is highly vulnerable to threats from neighbouring Iran.
If built, the two pipelines could ferry as much as 6.5mn barrels of oil a day around the strait, an amount equal to nearly 40% of the daily exports currently shipped through the narrow channel at the entrance of the Gulf.
Construction of the first, smaller line is forecast to begin this year. A second, more ambitious line carrying some 5mn barrels a day is still under discussion and could take a decade to build. Traders say the pipelines would add to the stability of the oil price.
Mind you if the US attacks Iran the oil price will rocket anyway…