Kuwait and Saudi Arabia are reportedly mapping out
alternative oil export routes, in the event that Iran would cut off major oil
shipping lines if its nuclear facilities were attacked.
Iran has threatened that any foreign attack on its
nuclear installations will be met with obstruction of strategic waterways in
the Gulf.
Countries in the Gulf collectively have about 62
percent of the world’s oil reserves. The Gulf’s Strait of Hurmuz is the most
important and strategic waterway for oil exports in the region and any
obstruction there could cause a crisis in the global oil industry.
Tension between Iran and the West, especially the
United States and Israel, is on the rise as both sides exchange verbal threats
and are ostensibly planning a military showdown.
If Iran is attacked by foreign troops, Tehran will do
all it can to defend itself, including impeding navigation in the Strait of
Hurmuz, commander of Iran’s Revolutionary Guards, Muhammad ‘Ali Al-Ja’fari,
told the government newspaper
Jam e-Jam
on Saturday.
He said this would likely push up oil prices even
higher than they are.
Alternative routes could be the use of pipelines that
run across through Saudi Arabia all the way to the Red Sea, Paul Rogers, a
professor of peace studies at Bradford University, told The Media Line.
Such pipelines do exist, but Rogers said he doubted
whether they had the capacity to make up for any major shortfalls caused by
interruptions at the Strait of Hurmuz.
New pipelines would take at least two years to build,
he predicted.
“I assume they’d run the existing pipelines to the
absolute maximum, but I doubt that would have a great impact,” Rogers said.
He estimated that any interruption in the near future
in the Gulf waterways would cause oil prices to soar, regardless of whether
alternatives were in place.
“If there were any kind of disruption you’d get an
immediate increase in oil prices just as a result of the expectation of
shortages and the result of speculation. I think it would hurt the global
industry massively, given the shortages we have at the moment and the nature of
the speculation market.”
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