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Maritime disruptions revive stalled pipeline connections: Previously stalled pipeline developments are receiving renewed interest regionally and globally after panic over possible oil flow disruptions as Iran mulled the closure of the Hormuz Strait. Some of these projects include an Iraq-Jordan connection, as well as an ambitious Russia-China pipeline.
ICYMI- Iraq, Kuwait, and Qatar are especially vulnerable to maritime disruptions in the Arabian Gulf. For example, a Hormuz closure would cut down Iraqi oil exports by about 83%, while fully halting Kuwait’s and Qatar’s energy exports, Arabian Gulf Business Insight (AGBI) reported, citing Iraqi energy expert Duraid Abdullah.
What options does Iraq have? Iraq — which exports most of its crude through tankers — has two options to reroute its oil away from the Arabian Gulf. One of these options is a Jordan pipeline connection — a USD 9 bn project long stalled due to political considerations, energy and economics professor at Basra University Nabil Al-Marsoumi told AGBI. Another option would be to transfer Iraqi crude through Syria towards its Mediterranean ports, a proposal that officials from both countries discussed back in April.
REMEMBER- Baghdad can export some volumes through Turkey via the 1mn b/d crude oilpipeline connecting Kirkuk to Ceyhan, but the pipeline has been out of service for over two years. Efforts to resume its operations ramped up earlier this year before hitting a dead end due to a dispute with the Kurdistan Regional Government. If it resumes operations, the pipeline can only handle around 500,000 b/d from Kurdistan and Kirkuk, and it is not connected to Iraq’s primary production base in Basra.
Beyond our region, China is reportedly mulling advancing an ambitious pipeline project connecting to Russia, the Wall Street Journal reports. The long dormant project — dubbed The Power of Siberia 2 — will require building 1.8k miles (c. 2900 km) of pipeline, and is expected to take five years to construct, analysts said. Russian President Vladimir Putin is expected to broach the subject with his Chinese counterpart during a meeting planned in September, the Wall Street Journal reported.
