Amidst the ongoing war between America and Iran and interruptions in energy supply in the Strait of Hormuz, Gulf countries are considering other options. Gulf countries are now working on plans to supply maximum oil without depending on the Strait of Hormuz. Its clear objective is to reduce dependence on one of the world’s busiest oil routes and limit Tehran’s influence on global energy supplies. Before the war between America and Iran, almost one-fifth of the world’s oil used to pass through this Strait of Hormuz.
New pipelines are being built
Iran has already announced plans to collect tolls from ships using the Strait of Hormuz. From this he can earn billions of dollars. Iran has also been accused of demanding millions of dollars from oil tankers for safe passage. At present, the United Arab Emirates (UAE) and Iraq have already started big pipeline projects. It will carry oil through other routes instead of Hormuz.
UAE is working rapidly on plans
According to Alexandra Paulus, analyst at Goldman Sachs, this much pipeline capacity could be ready by the end of 2027. UAE’s West-East Pipeline project is now almost half completed. Crown Prince Sheikh Khalid bin Mohammed bin Zayed has directed officials to complete the project by 2027. Once operational, the 252-mile long pipeline will run alongside the existing Fujairah pipeline and will double the UAE’s overland oil export capacity to 3.6 million barrels per day.
Sultan Al Jaber, head of Abu Dhabi National Oil Company, said that recent events have further strengthened the country’s long-term strategy. He said that much of the world’s energy still passes through very few choke points i.e. narrow paths. For this reason, the UAE had decided more than a decade ago to build such an infrastructure that would not pass through the Strait of Hormuz.
The UAE is also planning a major new port and container terminal on the Arabian Sea side of the Strait of Hormuz. This will provide another route for goods coming to this region, in which they will not have to pass through the strait. It may compete with Dubai’s Jebel Ali Port in future.
Iraq is also working on a 435 mile long pipeline
Apart from this, Iraq has started work on the 435 mile long Basra-Haditha pipeline, which will later connect to Jordan, Syria and Türkiye. This project is expected to transport 25 lakh (2.5 million) barrels of oil every day. The budget for its construction has been kept at 1.5 billion dollars.
Saudi Arabia also wants to increase the capacity of its pipeline
Saudi Arabia is also considering plans to increase the capacity of its crude oil pipeline to the Red Sea to 9 million (9 million) barrels per day. Only preliminary discussions are going on on this.
What is the goal of Gulf countries?
The aim of all these exercises of the Gulf countries is that about 45 percent of the pre-war oil exports from the Gulf can be sent through other routes instead of this strait. By the end of 2028, up to 7.3 million barrels of oil per day could flow through alternative routes, eliminating the need for the Strait of Hormuz for about 60 percent of the Gulf’s oil exports.
Will there still be dependence on the Strait of Hormuz?
Experts say that even if the Gulf countries implement their plans, the importance of the Strait of Hormuz will remain. The transport of approximately 70 to 90 lakh (7 to 9 million) barrels of oil and refined products every day will still depend on this waterway. Some new export routes also depend on stability in the Red Sea.
Iran-backed Houthi rebels in Yemen have recently threatened attacks near the Bab al-Mandeb Strait. This means that even if the Gulf countries are trying to reduce Iran’s influence on regional oil exports, they will not be able to eliminate it completely.
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