•  
  •  
  •  
  •  
  •  
  • Untitled Document
    Untitled Document

    Baker Institute paper calls for alternative to Hormuz oil route

    Baker Institute

    Improvements to the pipelines crossing the Arabian Peninsula would allow more of the oil produced in the Persian Gulf to avoid the Strait of Hormuz, according to a new paper from Rice University’s Baker Institute for Public Policy.

    "Creating a pipeline system that permits a substantial fraction of the Middle Eastern oil to be shipped to markets from Red Sea ports weakens the political influence of Iran by reducing the amount of oil that transits the Strait of Hormuz," wrote Dagobert Brito, Rice’s Peterkin Professor of Political Economy and a Rice Scholar at the Baker Institute.

    The latest tensions in the Middle East have policymakers looking for alternative ways to get petroleum from its source to world markets, said Brito, author of a paper titled "Revisiting Alternatives to the Strait of Hormuz."

    He cited increased threats to international shipping as Iranian military and Revolutionary Guards have invested in submarines, missile boats and mining capability. Because an estimated 20 percent of the world's oil passes through the Strait of Hormuz, the narrow sea-lane between Iran and Oman, ensuring the safety of that oil is "crucial to the world's economy," Brito said.

    He focused on a combination of geography and technology to resolve the dilemma. Two pipelines already transport Persian Gulf oil across Saudi Arabia to ports on the Red Sea, thus obviating the need to transit the Strait of Hormuz in tankers. But neither pipeline currently has the capacity to carry the volume required, so Brito suggested using drag reduction agents, "chemicals that are injected into pipelines to reduce the friction and to increase throughput in pipelines."

    Citing an earlier study he worked on with the Center for Naval Analysis, Brito found "that with a relatively low amount of investment, it would be possible to ship as much as 11 million barrels per day of Middle East oil production through the Red Sea."

    The growing regional rivalry between Saudi Arabia and Iran, Brito suggested, may make the Saudis "more receptive to proposals to augment trans-Arabian pipelines."

    In the end, any decision comes down to economics, Brito wrote. "The question that must be addressed is whether the probability that passage through the Strait of Hormuz will be disrupted and the resulting damage to the world economy is high enough to warrant the investment necessary to bypass it."

    Most Popular

    Related Articles

    Kinder Morgan begins binding open season for Utica Marcellus Texas Pipeline

    06/18/2015 Kinder Morgan Inc. has launched a binding open season to solicit commitments for the proposed Utica Marcellus Texas Pipeline, which would transport liquids produced from the Utica and Marcellus pro...

    Twin Eagle acquires StarMex Big Wells pipeline

    06/18/2015 Twin Eagle Resource Management LLC has acquired a 100% interest in StarMex Big Wells LLC, a 42-mile crude oil gathering system pipeline in the Eagle Ford shale region that connects to long-haul pip...

    Unimin begins unit train service to Marcellus region

    06/16/2015 Unimin Energy Solutions has made the first delivery of frac sands by unit train to its Jerry Run, West Virginia, terminal. Unimin, with partners CSX Railroad and Process Transload, operate a t...

    Ezra secures $115M in contracts for North Sea, West Africa, and Asia

    06/15/2015 Ezra Holdings Ltd. says that its Subsea Services division, EMAS AMC, has won several global contracts, including one for rigid pipelay on the Aviat field development in the UK North Sea, under the ...

    American Piping Products provides results of tender offer

    06/15/2015 American Piping Products Inc. has received tenders and related consents from holders of $93,057,000 aggregate principal amount of its 12⅞% senior secured notes due 2017 (CUSIP Nos. 02902P AA7 ...

    ETP purchases pipeline system from EdgeMarc Energy

    06/09/2015 Energy Transfer Partners LP has provided further details on its previously announced Revolution Project that will increase its operations in the growing Marcellus and Upper Devonian production area...

    More Oil & Gas Financial Articles

    Kinder Morgan begins binding open season for Utica Marcellus Texas Pipeline

    Thu, Jun 18, 2015

    Kinder Morgan Inc. has launched a binding open season to solicit commitments for the proposed Utica Marcellus Texas Pipeline, which would transport liquids produced from the Utica and Marcellus producing basins to delivery points along the Texas Gulf Coast, including connectivity to a Kinder Morgan dock.

    Twin Eagle acquires StarMex Big Wells pipeline

    Thu, Jun 18, 2015

    Twin Eagle Resource Management LLC has acquired a 100% interest in StarMex Big Wells LLC, a 42-mile crude oil gathering system pipeline in the Eagle Ford shale region that connects to long-haul pipelines in the Gardendale, Texas, area.  

     

    Unimin begins unit train service to Marcellus region

    Tue, Jun 16, 2015

    Unimin Energy Solutions has made the first delivery of frac sands by unit train to its Jerry Run, West Virginia, terminal. Unimin, with partners CSX Railroad and Process Transload, operate a transload and storage facility in the southern Marcellus region.

    Ezra secures $115M in contracts for North Sea, West Africa, and Asia

    Mon, Jun 15, 2015

    Ezra Holdings Ltd. says that its Subsea Services division, EMAS AMC, has won several global contracts, including one for rigid pipelay on the Aviat field development in the UK North Sea, under the auspices of the frame agreement that the company signed with Apache in the North Sea, bringing the total contract value to more than $115 million, including options, for the Group.

    American Piping Products provides results of tender offer

    Mon, Jun 15, 2015

    American Piping Products Inc. has received tenders and related consents from holders of $93,057,000 aggregate principal amount of its 12⅞% senior secured notes due 2017 (CUSIP Nos. 02902P AA7 and U0289P AA1) prior to the consent payment deadline of 5 p.m., New York City time, on June 11. 

    OGFJ photo of the day


    Click to view slideshow

    Oil & Gas Jobs

    Search More Job Listings >>
    Subscribe to OGFJ