Saudi Arabia is reportedly exploring the expansion of an alternative oil transportation route that would allow crude oil to be sent to the western Red Sea coast without passing through the Hormuz Strait.
On July 7, Reuters cited five sources familiar with the matter, stating that Saudi Arabia is in discussions to increase the capacity of the east-west pipeline that transports oil from its eastern fields to the Yanbu port on the western Red Sea coast.
According to the sources, Saudi Arabia is in initial talks with some neighboring countries to potentially expand the pipeline's capacity by up to 2 million barrels per day. Currently, the east-west pipeline can transport a maximum of 7 million barrels of crude oil to the Yanbu port. If the expansion proceeds as planned, the total capacity could increase to 9 million barrels per day.
It remains unclear whether the expansion will involve upgrades to existing infrastructure or the construction of new pipelines. However, it is expected that the actual expansion could take several years and cost billions of dollars.
Saudi Arabia's discussions with neighboring countries stem from the fact that Kuwait, Bahrain, and Qatar do not have separate transportation routes to bypass the Hormuz Strait. In fact, the Kuwait Oil Company indicated last month that it is discussing the transportation of Kuwaiti crude oil using the pipeline systems owned by Saudi Arabia and the United Arab Emirates (UAE).
This initiative is seen as a response to the heightened risks associated with reliance on the Hormuz Strait following the Iran conflict. The blockade of the strait by Iran forced Gulf oil-producing countries to halt up to 12 million barrels of oil production per day at one point, leading to a spike in international oil prices. Although oil flows have partially resumed following a preliminary agreement between the U.S. and Iran last month, they have not yet returned to pre-war levels.
Zaied Belbagy, managing partner at London-based consultancy Hardcastle Advisory, stated, "The discussions about a new pipeline route involving Saudi Arabia, Kuwait, and Qatar reflect a larger strategic reality. This conflict has made regional countries acutely aware of the risks of relying solely on the Hormuz Strait."
Other Gulf nations are also taking steps to mitigate the risks associated with the Hormuz Strait. The UAE is the only country, aside from Saudi Arabia, with significant bypass capacity. The UAE is currently constructing a new pipeline aimed at doubling its oil transportation capacity to Fujairah, with plans for it to be operational next year and approximately half of the work reportedly completed.
* This article has been translated by AI.
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