Saudi Arabia seeks to expand pipeline to reduce oil exports via Strait of Hormuz

Saudi Arabia seeks to expand pipeline to reduce oil exports via Strait of Hormuz
Saudi Arabia wants to increase capacity of its east-west pipeline by almost half in the next two years, to ensure its oil exports avoid passing the Strait of Hormuz.
2 min read
25 July, 2019
Riyadh urged importers to secure shipments passing through the strategic Gulf route [Getty]
Saudi Arabia wants to increase capacity of its east-west pipeline by almost half in the next two years, to ensure its oil exports avoid passing the Strait of Hormuz, the energy minister said on Thursday.

Khalid al-Falih urged importers to secure shipments passing through the strategic Gulf route, following the recent seizure of a British oil tanker by Iran.

In an interview with Reuters, Falih also called on the international community to take action to protect oil supplies and secure the Strait.

Oil importers "have to do what they have to do to protect their own energy shipments because Saudi Arabia cannot take that on its own," he said in an interview in India.

The US, which recently imposed economic sanctions on Iran to halt its oil exports, is trying to rally support for a global coalition to secure the Gulf waters.

Britain has called for a European-led naval mission to protect shipping.

"India also needs to do its part in securing free navigation of sea links transporting energy to the rest of the world," Falih said after meeting Indian Oil Minister Dharmendra Pradhan.

India has deployed two warships in the Strait.

Saudi Arabia already exports some of its oil through the Red Sea using a 1200-km pipeline that runs from the east of the kingdom, where much of its oil production is based, to the Red Sea port city of Yanbu in the west.

Saudi Arabia aimed to maximise exports through the 5 million barrels per day (bpd) east-west pipeline if required, he said.

"We are hoping to increase it to 7 (million bpd)," Falih said, although he said expanding capacity of the east-west pipeline, called Petroline, would take two years.

In his talks in India, Falih said Saudi Arabia was ready to supply additional oil to India.

The minister said global oil demand was reasonably healthy but was lower than estimates had put it at the start of 2019.

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