War in Iran prompts Gulf countries to accelerate plans to circumvent Strait of Hormuz

Iran says the Strait of Hormuz will only reopen with the US exit. The war in Iran is forcing major oil producers in the Persian Gulf to reformulate the way they export the product and reduce dependence on the Strait of Hormuz, the region's main exit route. According to "The New York Times", countries such as Saudi Arabia, the United Arab Emirates, Kuwait and Iraq are accelerating projects for pipelines, terminals and storage areas that allow oil to be transported without passing through the strait. The investments are expected to cost billions of dollars and take years to complete, but governments and companies consider the new structures necessary given the increased risks in the region. Even if a ceasefire between the United States and Iran is reached, producing countries assess that depending on a single export route has become too great a risk. The move could also, over time, reduce Iran's influence over oil trade in the region, as neighboring countries will be less dependent on a maritime passage that can be affected by conflict. Trump has already stated that the US will control the Strait of Hormuz and block access to Iranian ports REUTERS "I don't think any country in the world wants to go back to being so dependent on this crossing point," Ben Cahill, an energy analyst at the University of Texas at Austin, told the NYT. According to him, producers have started to prioritize the safety of their structures, even if this implies higher costs and less efficient operations. Exports through the strait plummet Before the United States and Israel began military strikes against Iran on February 28, about 20 million barrels of crude oil per day passed through the Strait of Hormuz. The sea passage connects the Persian Gulf to the Gulf of Oman and is one of the main routes used to take oil produced in the region to international markets. The war, however, changed this flow. Blockades imposed by the United States and Iran, sea mines, missile attacks and the sharp increase in the price of insurance for ships practically interrupted the normal functioning of the route. The NYT explains that last week, crude oil exports through the strait had fallen to around 3.7 million barrels per day, according to Kpler, a company that monitors maritime transport. Still, that doesn't mean that only that much volume is leaving the Gulf. Part of the oil continues to be transported by ships that adopt measures to make tracking difficult. Another portion leaves via alternative routes that already existed, mainly oil pipelines that do not depend on the Strait of Hormuz. Most of the ships that still pass through the region face additional risks. Some navigate Iranian drone strikes; others turn off their tracking systems to make it harder for them to be identified. At least 17 maritime workers died in the region. Emirates expand alternative route In Fujairah, a port city in the United Arab Emirates facing the Gulf of Oman, teams are working 24 hours a day to build a second oil pipeline, parallel to an existing structure. The system transports oil from Abu Dhabi's onshore fields to the coast, allowing the product to be shipped without passing through the Strait of Hormuz. The new project aims to double the capacity of this alternative route to 3.6 million barrels per day. With this, almost all the oil produced on land in Abu Dhabi will be able to reach ships that carry out international transport without having to cross the strait. The UAE's state-owned energy company, Abu Dhabi National Oil Company (ADNOC), also announced this week that it intends to invest US$8.2 billion (R$42.5 billion) in expanding its natural gas business. The company is also considering building a facility to export liquefied natural gas, a form of natural gas cooled to very low temperatures to facilitate its transport on ships, on the east coast of the Emirates. The location would allow it to avoid the Strait of Hormuz, according to Peter van Driel, ADNOC's chief financial officer. Saudi Arabia expands oil pipeline to the Red Sea In Saudi Arabia, state-owned Saudi Aramco is accelerating a billion-dollar expansion of the East-West Oil Pipeline, a structure created precisely to offer the country an alternative to maritime transport through the Gulf, reported the NYT. Built during the war between Iran and Iraq in the 1980s, the pipeline runs 1,201 kilometers through the Arabian Peninsula to the port of Yanbu, on the Red Sea. Aramco Chairman Yasir O. Al-Rumayyan called the structure this year the country's economic "lifeline." Since military attacks by the United States and Israel caused Iran to effectively interrupt the Strait of Hormuz, the pipeline has managed to redirect around 7 million barrels of oil per day. Now, Saudi authorities are working to add another 1 million to 2 million barrels per day to the structure's capacity. The country is also considering building a second pipeline, smaller and parallel to the current one, to transport petroleum products, such as fuels. "Regarding the export of our crude oil, we are actively working to increase our options at this time," Amin Nasser, chief executive of Saudi Aramco, said last week. Other countries also look for alternatives The uncertainty surrounding the Strait of Hormuz has led other Gulf producers to accelerate similar projects. Kuwait is negotiating with Saudi Arabia and other Arab countries to build a pipeline that would connect its oil fields to ports on the Red Sea or in Oman. Iraq and Jordan have resumed plans that had been on hold for years to build a pipeline with the capacity to transport up to 1 million barrels per day to the Red Sea port of Aqaba, according to information from Jordanian state television. Iraq is also accelerating plans