Saudi Arabia and the United Arab Emirates have opened new pipelines bypassing the Strait of Hormuz in order to secure exports following Iran’s renewed threats to close this oil shipping lane.
As EU ban on Iranian crude imports came into force on July 1 with Iran threatening to block the Strait of Hormuz. The waterway accounts for more than a third of the world's seaborne oil exports from Saudi Arabia, Iran, Kuwait, Iraq, the UAE and Qatar to the rest of the world.The UAE on Sunday loaded the first tanker from its new pipe which links the oilfields near Abu Dhabi with the port of Fujairah in the Indian Ocean. The 370-kilometre pipeline has a capacity of 1.5 million barrels a day, accounting for 65%of the country’s exports.Meanwhile the Saudi authorities have begun test pumping through their 1.65 million barrel-a-day pipeline. This hasn’t been used since the 1990s and can supply about 16% of Saudi exports. The so called Iraqi Pipeline in Saudi Arabia (IPSA) was built the 1980s to bypass Gulf shipping lanes after oil tankers were attacked during the Iran-Iraq war. Saudi Arabia confiscated the pipeline in 2001 as compensation for Iraqi debts and has used it to transport gas to domestic power plants.