Saudi state oil giant Aramco is working to expand a crude pipeline that circumvents the Strait of Hormuz as the world continues to experience the biggest energy supply shock in history, CEO Amin Nasser said yesterday.
The effective blockade of the chokepoint that links the Gulf to world markets, previously a conduit for 20 per cent of global oil supplies, has redrawn global energy flows and infrastructure investment priorities among the region’s oil producers.
Last month, Saudi Energy Minister Prince Abdulaziz bin Salman Al Saud said the kingdom was looking to expand its capacity to export crude by pipeline to as much as 10 million barrels per day by repurposing a domestic gas pipeline and investing in its existing East-West network.
“With regard to the expansion to our East-West pipeline and the additional networks that we are building, this work has already started,” Nasser told analysts on a call following the company’s results.
Aramco currently has three export route options – the Gulf via the Strait of Hormuz, the Bab Al Mandeb Strait and the Suez Canal.
The company is doing engineering work for export routes in addition to these, Nasser said.
The East-West pipeline, which has been attacked several times throughout the US-Iran war, has the capacity to carry up to 7m barrels of oil a day. Nasser has previously described it as a critical lifeline.
Nasser said until final investment decisions are made, the company will not disclose details on the new export routes being worked on.
The impact of the crisis extends far beyond the energy market, Nasser said earlier in a statement to Reuters. “Higher transportation costs, fertiliser shortages, and impacts on food and consumer goods are feeding into inflationary pressures across the global economy,” he said.
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