Summary
The closure of the Strait of Hormuz due to tensions involving the United States, Israel, and Iran has caused major disruptions in oil shipments. To address this, countries are considering alternative pipelines in the Middle East. One such pipeline, the Saudi East-West pipeline, is being used more to offset blocked oil routes, although it cannot fully replace the capacity lost due to the closure.
Key Facts
- The Strait of Hormuz closure affects 20% of the world’s oil and gas shipments.
- The closure followed US-Israeli military action against Iran in late February.
- Iran allows some non-US/Israeli ships to pass but requires prior approval.
- Saudi Arabia’s East-West pipeline is a key alternative, with a capacity of 7 million barrels a day.
- Saudi Aramco increased oil flow through its pipeline due to the Hormuz strait closure.
- The East-West pipeline originally transported 770,000 barrels per day but increased to 2.9 million recently.
- The East-West pipeline cannot fully replace the 20 million barrels per day typically passing through Hormuz.
- Security risks remain, such as potential attacks by the Houthi group in areas like the Bab al-Mandeb Strait.
