Following heightened tensions over the transport of crude oil through the strategic Strait of Hormuz shipping lanes, Iraq are stepping up preparations to diversify their options for the export of crude oil.
With a number of recent incidents and heightened rhetoric suggesting the potential for interference and disruption of crude oil transport vessels in the area, Iraq Prime Minister Adel Abdul Mahdi has announced that the country must prioritize the development of projects providing an alternative route for crude oil export, with Iraq heavily reliant on exports through the Strait from its southern ports. More than 90% of Iraq's economy is delivered through oil exports, therefore any disruption to their core export route would potentially be highly damaging.
In order to mitigate the threats caused by any disruption in the Strait, Mahdi has revealed that discussions were held to establish the most suitable pipeline exports projects which include the project for a pipeline to Aqaba in Jordan as well as pipeline options to Syria, Yanbu in Saudi Arabia and the rehabilitation of the second pipeline connecting the Kurdistan Region to Ceyhan in Turkey.
An estimated 18 million barrels of oil per day (bpd) are transported through the Strait of Hormuz, with 3.5 million bpd coming from Iraq.
The U.S. have this week also announced the potential for the development of a naval coalition in the area to provide protection for the shipping lanes and secure the passage for crude oil transport vessels.