A Workaround to the Hormuz Chokepoint
The East-West Pipeline in Saudi Arabia, which delivers oil to the shores of the Red Sea, has been an important workaround to the choking of tanker traffic by Iran in the Strait of Hormuz, the only exit for tankers from the Persian Gulf to the open sea.
Claimed Capacity Versus Real-World Throughput
The Saudi government claims that 7 million barrels per day (mbpd) of crude oil can flow westward through the pipeline to the port of Yanbu, though the current exports are thought to be lower (perhaps 5 mbpd) than that given infrastructure restraints.
RelatedRedotPay Completes Audit as U.S. Listing Plans ContinueWhy the Strait of Hormuz Matters So Much
The Strait of Hormuz is one of the world's most important oil chokepoints, with a large share of global seaborne crude and a significant portion of global LNG passing through its narrow shipping lanes, making any disruption there a persistent source of concern for energy markets.
The Limits of Pipeline Alternatives
Pipeline workarounds like the East-West line can reduce, but not eliminate, a producer's exposure to a chokepoint disruption, since refining capacity, storage, and onward shipping routes on the other end still need to absorb the rerouted volumes without their own bottlenecks emerging.
