The Wall Street Journal, Cairo, 24 Dec 2011 – Persian Gulf oil ministers on Sunday will consider rerouting oil as a precautionary measure to mitigate the impact of any blockade of the Strait of Hormuz, senior Gulf oil officials said on Saturday.
The debate would come a day after Iran started war games around the vital oil route and after Western consuming nations on Tuesday sought more Gulf oil in case Tehran comes under an international embargo.
Iran has denied the war games would lead to a blockade of the route, but the news come amid heightened tensions between the West and Iran over its nuclear program.
An Iranian lawmaker warned last Sunday that Tehran could block the strait if it comes under an international oil embargo, citing proposed U.S. sanctions against Iran’s central bank.
In addition, European nations are considering a regional ban on Iranian crude and met with officials from Gulf countries Tuesday in Rome to seek possible oil-supply replacements.
The idea of discussing the topic was floated by some oil ministers and could end up being a main topic of talks on Sunday at a gathering of the Gulf Cooperation Council in Abu Dhabi, the officials said.
They said the ministers could examine boosting the use of the 745-mile Petroline, a pipeline crossing from eastern Saudi Arabia to the Red Sea that has a capacity of 4.8 million barrels a day. Saudi Arabia has previously said it is being run at only half capacity.
Another bypass is a 1.5-million-barrel-a-day pipeline that crosses the emirate of Abu Dhabi and ends at the port of Fujairah, just south of the strait. The route was supposed to become operational in December, but it is unclear whether it has started up.
The other alternate routes could include the 1.65-million-barrel-a-day Iraqi Pipeline across Saudi Arabia and the 500,000-barrel-a-day Tapline to Lebanon, which are both inactivate, according to the U.S. Energy Information Administration .
The strait, which is located between Iran and Oman, handles about 33% of all ocean-borne traded oil.