News / Middle East

Arab Gulf States Urged to Increase Pipelines After Iran's Oil Threats

An oil pump works at sunset in the desert oil fields of Sakhir, Bahrain, in the Persian Gulf.
An oil pump works at sunset in the desert oil fields of Sakhir, Bahrain, in the Persian Gulf.

As Iranian threats to close the Strait of Hormuz intensify, some energy experts are calling on Arab Gulf states to find alternative ways to export their petroleum. Experts differ, however, on whether proposed pipelines are economically feasible or whether Iran will follow through with its threats.

Nearly 40 percent of seaborne traded oil passes through the Strait of Hormuz, which connects the Persian Gulf to the Indian Ocean and is bordered by Iran and Oman. Iran is threatening to block the route. Any closure of the strategic waterway would likely send oil prices soaring and have a significant impact on the global economy.

Alternatives

Already one Gulf oil producer is opening an alternative route.

Earlier this month, the United Arab Emirates announced that a new pipeline able to pump 1.5 million barrels of oil per day from fields in Abu Dhabi to its Indian Ocean coast should be operating by June. The Emirates currently produces about 2.5 million barrels per day.

Kuwaiti oil expert Mousa Marafi says other Gulf producers should embark on similar projects.

"The pipeline that the UAE is doing is something related to the UAE only," he said. "But this is needed for Kuwaiti exports, for Saudi exports and also for Qatari exports."

Arab Gulf States Urged to Increase Pipelines After Iran's Oil Threats
Arab Gulf States Urged to Increase Pipelines After Iran's Oil Threats
Iran is vowing to “definitely” close the Strait if further sanctions on its controversial nuclear program prevent it from selling its crude abroad.

Sanctions

Western nations have been imposing tighter sanctions against Iran, hoping the moves will force the country to abandon its nuclear work. The West believes Iran’s nuclear program is aimed at building weapons, but Tehran insists it is solely for peaceful purposes.

The European Union agreed to an oil embargo against Iran starting from July. It followed similar sanctions agreed to by the United States.

According to Marafi, the continued threats by Tehran highlight the vulnerability of the Gulf oil producers.

"It’s a warning that you need this pipeline. And we should really do this very soon. This is important for the world altogether," he said.

Impact

Other analysts, however, warn Iran would likely suffer most if the Strait is disrupted.

Iranians are heavily dependent on the shipping channel for trade. Reeling from the current sanctions, Iran is experiencing rapid inflation and currency devaluation.

"The reality is that this neighborhood has lived with a variety of unstable and uncertain circumstances over the history of the last 50 years of the oil industry and never for one moment was the Strait of Hormuz closed," said Sean Evers, managing partner at Gulf Intelligence, who believes Iran is likely to renege on its promise to close the Strait.

Oil analyst Simon Wardell says not enough pipelines could be feasibly built to compensate for the shutdown of the Strait.

"With something in the region of 16 to 17 million barrels a day going through, that’s an awful lot of pipeline capacity you would have to move. So I think whatever happens you’re always going to have substantial volumes of oil flowing through that particular area," he said.

Retaliation

Wardell says the U.S. and other nations would not allow the Strait to be blocked for long. Western allies have announced they would take swift action against any move by Iran to halt oil flow.

"It is going to be in most counties’ interest - China, America, Europe - everyone’s interest really, to make sure the Strait is open so chances are the Strait will remain open," Wardell said.

For the time being, some 17 million barrels of oil flow daily through the Strait as U.S. warships patrol the area to make sure of safe passage.

You May Like

Myanmar Fighting Poses Dilemma for China

To gain some insight into conflict, VOA’s Steve Herman spoke with Min Zaw Oo, director of ceasefire negotiation and implementation at Myanmar Peace Center More

Australia Concerned Over Islamic State 'Brides'

Canberra believes there are between 30 and 40 Australian women who have taken part in terror attacks or are supporting the Islamic State terror network More

Recreational Marijuana Use Now Legal in Washington, DC

Law allows adults 21 and over to privately possess and smoke 0.05 kilogram of pot, and to grow small amounts of the plant More

This forum has been closed.
Comments
     
There are no comments in this forum. Be first and add one

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
US Supreme Court Hears Hijab Discrimination Casei
X
Katherine Gypson
February 25, 2015 11:30 PM
The U.S. Supreme Court has heard opening arguments in a workplace religious discrimination case that examines whether a clothing store can refuse to hire a young woman for wearing the headscarf she says is a symbol of her Muslim faith. Katherine Gypson reports from the Supreme Court.
Video

Video US Supreme Court Hears Hijab Discrimination Case

The U.S. Supreme Court has heard opening arguments in a workplace religious discrimination case that examines whether a clothing store can refuse to hire a young woman for wearing the headscarf she says is a symbol of her Muslim faith. Katherine Gypson reports from the Supreme Court.
Video

Video Falling Gas Prices Hurt Nascent Illinois Hydraulic Fracturing Industry

Falling oil prices are helping consumers purchase cheaper petroleum at the pump. But that’s made hydraulic fracturing or “fracking” less economically viable for the companies in the United States invested in the process. VOA’s Kane Farabaugh reports on one Midwestern town that was hoping to change its fortunes by cashing in on the next big U.S. oil boom.
Video

Video Fighting in Sudan's South Kordofan Fuels Mass Displacement

Heavy fighting in Sudan's South Kordofan state is causing hundreds of thousands to flee into uncertain conditions. Local aid organizations estimate as many as 400,000 civilians have been internally displaced since the conflict began more than three years ago, while another 250,000 have fled across the border to refugee camps in South Sudan. VOA's Adam Bailes reports.
Video

Video Lao Dam Project Runs Into Opposition

A Lao dam project on a section of the Mekong River is drawing opposition from local fishermen, international environmental groups and neighboring countries. VOA's Say Mony visited the region to investigate the concerns. Colin Lovett narrates.
Video

Video A Filmmaker Discovers Her Biracial Identity in "Little White Lie

Lacey Schwartz grew up in an upper middle-class Jewish family, in a town in upstate New York where almost everyone she knew was white. She assumed that she was, as well. Her recent documentary, Little White Lie, tells the story of how she uncovered the secret of her true racial background. VOA’s Carolyn Weaver has more on the film.
Video

Video Deep Under Antarctic Ice Sheet, Life!

With the end of summer in the Southern hemisphere, the Antarctic research season is over. Scientists from Northern Illinois University are back in their laboratory after a 3-month expedition on the Ross Ice Shelf, the world’s largest floating ice sheet. As VOA’s Rosanne Skirble reports, they hope to find clues to explain the dynamics of the rapidly melting ice and its impact on sea level rise.
Video

Video US-Cuba Normalization Talks Resume Friday

Negotiations aimed at normalizing diplomatic relations between the U.S. and Cuba resume Friday. On the table: lifting a half-century trade embargo and easing banking and travel restrictions. There's opposition in Congress, but some analysts say there may be sufficient political and economic incentives in both nations for a potential breakthrough this year. VOA's Mil Arcega reports.
Video

Video Pakistan's Deadline For SIM Registration Has Cellphone Users Scrambling

Pakistani cell phone users have until midnight Thursday to register their SIM cards, or their service will be cut off. While some privacy experts worry about government intrusion, many Pakistanis are just worried about keeping their phone lines open. VOA Deewa reporter Arshad Muhmand has more from Peshawar.
Video

Video Myanmar Warns Factory Workers to End Strikes

Outside Myanmar's main city Yangon, thousands of workers walked off their jobs earlier this month demanding a doubling of their wages, pay raises after a year and input from labor unions on industrial regulations. Since Friday, the standoff has grown more tense as police moved in to disrupt the sit-ins, resulting in clashes that injured people from both sides. VOA correspondent Steve Herman visited industrial zones which have become a focus of Myanmar's fledgling workers rights movement.
Video

Video Oscar Winners Do More Than Thank the Academy

The Academy Awards presentation is Hollywood’s night to reward the best movies from the previous year. It’s typically a lot of glitter, a lot of thank you’s, a lot of speeches. But many of this year’s speeches carried messages beyond the thank you's. VOA’s Carolyn Presutti takes a look.

All About America

Circumventing Censorship

An Internet Primer for Healthy Web Habits

As surveillance and censoring technologies advance, so, too, do new tools for your computer or mobile device that help protect your privacy and break through Internet censorship.
More