Saudi Arabia and UAE ready for possible blockage of the Hormuz Strait

Saudi Arabia and the UAE have launched new pipelines for transporting oil, by-passing the Strait of Hormuz which Tehran threatens to block, the Financial Times writes.

The UAE loaded the first tanker with oil from the 370-meter pipeline, which connects the oil-producing region in Abu Dhabi with the port of Al Fujeir in the east of the UAE near the Strait of Hormuz, Interfax reports.

Construction of the oil pipeline, which was postponed for several years, cost $3.5 billion. The capacity of the pipeline is 1.5 million barrels per day, or 65% of the UAE's exports.

Establishing  new pipelines enables the total capacity of the oil pipelines to double to 6.5 million barrels per day.

“Several oil pipelines will decrease the risk of Iran blocking the Strait of Hormuz,” Rafael Kandioti, analyst of Imperial College London, thinks. “Extension of pipeline capacities answers the interests of Saudi Arabia.”

At the same time, Abu Dhabi and Riyadh emphasize that construction of oil pipelines is not a direct answer to Tehran’s threats. However, traders and experts believe that this step is a counterbalance to Iranian pressure.

Moreover, Saudi Arabia has modernized its gas pipeline which connects deposits in the Eastern province and the terminal Yanbu on the Red Sea to transport oil through it. This pipeline’s capacity is 2 million barrels per day, which is 25% of the country's daily exports.

“We want to be ready,” a source in the Oil Ministry of Saudi Arabia said. “The pipeline makes us flexible.”

Saudi Arabia also has three other pipelines which enable fuel to be transported, by-passing the Strait of Hormuz.