US EIA reminder: Strait of Hormuz world’s most important oil chokepoint; almost 20% of oil traded worldwide
With Iran’s current threat to close the Strait of Hormuz in response to sanctions as a backdrop, the US Energy Information Agency issued an update to its “World Oil Transit Chokepoint” brief (earlier post), noting that “Hormuz is the world’s most important oil chokepoint due to its daily oil flow of almost 17 million barrels in 2011, up from between 15.5-16.0 million bbl/d in 2009-2010. Flows through the Strait in 2011 were roughly 35 percent of all seaborne traded oil, or almost 20 percent of oil traded worldwide.”
|Chokepoints are narrow channels along widely used global sea routes, some so narrow that restrictions are placed on the size of vessel that can navigate through them. They are a critical part of global energy security due to the high volume of oil traded through their narrow straits.|
More than 85% of the crude oil exports flowing through the Strait went to Asian markets, with Japan, India, South Korea, and China representing the largest destinations, EIA said.
The Strait is located between Oman and Iran, and connects the Persian Gulf with the Gulf of Oman and the Arabian Sea. At its narrowest point, the Strait is 21 miles wide, but the width of the shipping lane in either direction is only two miles, separated by a two-mile buffer zone.
The Strait is deep and wide enough to handle the largest crude oil tankers, with about two-thirds of oil shipments carried by tankers in excess of 150,000 deadweight tons.
|The Strait of Hormuz and alternate routes (pipelines). Source: EIA. Click to enlarge.|
Alternate routes to the Strait include:
The 745-mile long Petroline, also known as the East-West Pipeline, across Saudi Arabia from Abqaiq to the Red Sea. The East-West Pipeline has a nameplate capacity of about 5 million bbl/d.
The Abqaiq-Yanbu natural gas liquids pipeline, which runs parallel to the Petroline to the Red Sea, has a 290,000-bbl/d capacity.
Additional oil could also be pumped north via the Iraq-Turkey pipeline to the port of Ceyhan on the Mediterranean Sea, but volumes have been limited by the closure of the Strategic pipeline linking north and south Iraq.
The United Arab Emirates is also completing the 1.5 million bbl/d Abu Dhabi Crude Oil Pipeline pipeline that will cross the emirate of Abu Dhabi and end at the port of Fujairah just south of the Strait.
Other alternate routes could include the deactivated 1.65-million bbl/d Iraqi Pipeline across Saudi Arabia (IPSA), and the deactivated 0.5 million-bbl/d Tapline to Lebanon.
Use of the alternate routes would increase the cost of transportation.
Other critical chokepoints highlighted in the brief include:
The Strait of Malacca, located between Indonesia, Malaysia, and Singapore, which links the Indian Ocean to the South China Sea and Pacific Ocean. Malacca is the shortest sea route between Persian Gulf suppliers and the Asian markets. Malacca is the key chokepoint in Asia with an estimated 13.6 million bbl/d flow in 2009, down slightly from its peak of 14 million bbl/d in 2007.
Suez Canal/SUMED Pipeline. Closure of the Suez Canal and SUMED Pipeline would add an estimated 6,000 miles of transit around the continent of Africa. The Suez Canal is located in Egypt, and connects the Red Sea and Gulf of Suez with the Mediterranean Sea, spanning 120 miles.
The Strait of Bab el-Mandab is a chokepoint between the horn of Africa and the Middle East, and a strategic link between the Mediterranean Sea and Indian Ocean. It is located between Yemen, Djibouti, and Eritrea, and connects the Red Sea with the Gulf of Aden and the Arabian Sea. Most exports from the Persian Gulf that transit the Suez Canal and SUMED pipeline also pass through the Bab el-Mandab.
The Bosporus and Dardanelles comprise the Turkish Straits and divide Asia from Europe. The Bosporus connects the Black Sea with the Sea of Marmara, and the Dardanelles links the Sea of Marmara with the Aegean and Mediterranean Seas. The 17-mile long waterway located in Turkey supplies Western and Southern Europe with oil from the Caspian Sea Region. An estimated 2.9 million bbl/d flowed through this passageway in 2009, of which more than 2.5 million bbl/d was crude oil.
Panama Canal. The United States is the primary country of origin and destination for all commodities transiting through the Panama Canal, however, it is not a significant route for US petroleum trade. The Panama Canal is an important route connecting the Pacific Ocean with the Caribbean Sea and Atlantic Ocean. The Canal is 50 miles long, and only 110 feet wide at its narrowest point called Culebra Cut on the Continental Divide. Closure of the Panama Canal would greatly increase transit times and costs adding more than 8,000 miles of travel. Vessels would have to reroute around the Straits of Magellan, Cape Horn and Drake Passage over the tip of South America.
The Trans-Panama Pipeline (TPP - Petroterminal de Panama, S.A.) is located outside the former Canal Zone near the Costa Rican border and runs from the port of Charco Azul on the Pacific Coast to the port of Chiriquie Grande, Bocas del Toro on the Caribbean. The pipeline was built in 1982, with the original purpose being to facilitate crude oil shipments from Alaska’s North Slope to refineries in the Caribbean and the US Gulf Coast. However, in 1996, the TPP was shut down as oil companies began shipping Alaskan crude along alternative routes. Since 1996, there were intermittent requests and proposals to utilize the TPP. In August 2009, TPP completed a project to reverse its flows in order to enable it to carry oil from the Caribbean to the Pacific.
The Danish Straits are becoming an increasingly important route for Russian oil exports to Europe. An estimated 3.3 million bbl/d flowed westward through this waterway in 2009 to European markets, up from 2.4 million bbl/d in 2005. Russia has increasingly been shifting its crude oil exports to its Baltic ports, especially the relatively new port of Primorsk, which accounted for half of the exports through the Straits. An additional 0.3 million bbl/d of crude oil, primarily from Norway, flows eastward to Scandinavian markets.