The Abu Dhabi Crude Oil Pipeline project, or Adcop, has been dogged by repeated delays over the past few years. But now “the pipeline is almost complete, and will hopefully be operational within six months, by May or June.
The $3.29 billion pipeline, with a capacity of about 1.5 million barrels of oil a day, will stretch 370 kilometers, or 230 miles, from Habshan in Abu Dhabi — the collection point for Abu Dhabi’s onshore crude oil production — to an offshore oil terminal in the emirate of Fujairah.
Major buyers of Iranian oil, including China, Japan and India, are reconsidering their oil imports from Iran. The IHS research note said South Korea, one of the five biggest importers of Iranian crude, had already adopted some trade restrictions while China had begun to turn to alternative suppliers, including Iraq, where production is slowly rising, to displace some of the 500,000 barrels that it imports daily from Iran.
National Journal – Saudi Arabia has the Petroline pipeline can now carry 5 million barrels a day. It would take about 18 months for a significant upgrade to Petroline to bring its capacity up to 11 million barrels daily, enough to carry all Saudi exports with spare capacity for others.
Hormuz, the only exit from the Persian Gulf, lies between Iran on the northern side and Oman on the southern. Almost 17 million barrels of oil pass through it daily, and five of the world’s largest oil producers–Saudi Arabia, Iran, Iraq, Kuwait, and the United Arab Emirates–are largely or wholly dependent on it, as is Qatar, the world’s leading exporter of liquefied natural gas.
And while oil gets all the attention, other key products must travel through the Strait, including 28 percent of the world’s liquefied natural gas. It’s the only source of gas for Japan, South Korea, and Taiwan, and it’s a vital fuel for reducing European dependence on Russia. Iran’s Arab neighbors on the Gulf rely heavily on seaborne food and other imports.
Like its Gulf neighbors, Iran relies on the Strait to move food and other necessary goods. The regime would only hurt an already struggling economy by shutting down the Strait: Unemployment is officially at 12.5 percent (Iran observers believe the figure is much higher), and Iranian officials admit that inflation could rise more than 20 percent later this year.
Other countries have strategic reserves maintained by the International Energy Agency, an organization of 28 major oil-importing states. Reuters reported on Friday that the agency is discussing releasing strategic oil stocks in the event of a Hormuz shutdown. Each member, including the U.S. and its European partners, is required to maintain oil stocks equal to 90 days worth of imports in case of a market emergency. China has about 20 days of stocks but plans to expand this to 100 days’ cover, while India is working on a two-week reserve.
These emergency supplies would likely replace Hormuz-based oil for the time it would take the U.S. Navy to defeat an Iranian blockade of the Strait–about two weeks, according to analysts from Societe Generale, a major financial-services firm. But they could not outlast a significantly prolonged closure or disruption. Instead of an outright blockade, Iran might aim instead at disruption or sabotage, creating uncertainty and making military countermeasures more problematic.
If you liked this article, please give it a quick review on ycombinator or StumbleUpon. Thanks
Brian Wang is a Futurist Thought Leader and a popular Science blogger with 1 million readers per month. His blog Nextbigfuture.com is ranked #1 Science News Blog. It covers many disruptive technology and trends including Space, Robotics, Artificial Intelligence, Medicine, Anti-aging Biotechnology, and Nanotechnology.
Known for identifying cutting edge technologies, he is currently a Co-Founder of a startup and fundraiser for high potential early-stage companies. He is the Head of Research for Allocations for deep technology investments and an Angel Investor at Space Angels.
A frequent speaker at corporations, he has been a TEDx speaker, a Singularity University speaker and guest at numerous interviews for radio and podcasts. He is open to public speaking and advising engagements.