Oman Sets Up Way for Arabian Gulf Oil Exporters to Avoid Strait of Hormuz

Oman Steps Up Plan for Middle East’s Biggest Oil-Tank Farm Bloomberg reports:

Oman’s ambitious goal of building the biggest oil-storage facility in the Middle East is finally progressing, more than seven years after the Gulf sultanate announced the plan.
Oman Tank Terminal Co. has almost finished constructing eight tanks to store crude for a new refinery near the town of Duqm on the Arabian Sea. It’s now pushing ahead with others that could be used by oil companies and traders, according to two people with knowledge of the project. That would eventually increase Duqm’s capacity to at least 25 million barrels, according to OTTCO’s website.
The Ras Markaz Crude Oil Park could provide an alternative for energy traders and exporters eager to avoid the Strait of Hormuz, a choke-point at the mouth of the Persian Gulf that’s seen numerous flareups in recent years, including Iranian seizures of tankers. The Omani facility lies roughly 600 miles (966 kilometers) from the waterway. The United Arab Emirates port of Fujairah, the region’s largest hub with 14 million barrels of commercial crude-storage capacity, is less than 100 miles from Hormuz.
“Crude storage that anybody can use outside the Strait of Hormuz, that can go either east or west, is probably a good thing,” said Alan Gelder, vice president for refining, chemicals and oil markets at consultant Wood Mackenzie Ltd. Iraq and Kuwait, a co-investor in the refinery, might see Duqm as an attractive place to park their crude outside the Gulf, he said.

Of course, Iran's fallback is to use its proxy Houit rebels in Yemen to clog up the Bab al Mandeb chokepoint and the lower end of the Red Sea to screw up shipping through the Suez Canal. OTTC info here:

Ras Markaz Crude Oil Park The first phase of the Ras Markaz Crude Oil Park will be operational in 2021, and will feature storage tanks of different sizes. The total capacity of Phase 01 will be up to 25 million barrels of crude oil of which Duqm Refinery will build and utilize approximately 6 million barrels. The tank storage terminal will feature offshore loading and unloading facilities to cater to Suezmax and VLCC tankers via Single Point Moorings. The terminal will be connected via a 70km pipeline to the Duqm Refinery and a potential of connecting to Oman's Main Oil Pipeline at Nahada 440km away.

Messages from China - One Clear and One Odd

First the clear signal We Don't Like Your FONOPS and Exercises in the South China Sea so we'll show off our anti-ship ballistic missile and demonstrate we lied when we said we wouldn't militarize those islands we made in the SCS.

China's military conducted a flight test of an anti-ship ballistic missile in the contentious South China Sea last weekend in violation of a pledge four years ago by President Xi Jinping not to militarize the waterway.
***
China also may have conducted the provocative missile test in reaction to the recent U.S.-Japan naval exercises in the South China Sea.

Well, of course. It's a warning shot across the bow.

The odd message? China Raises Security Warning on Ships Plying Malacca Strait
:

China raised the security level for its vessels heading through the

Strait of Malacca, a key Asian trade route and major oil choke point.

The transport ministry advised Chinese-flagged ships to take heightened security steps and increased its security warning to level three, according to a copy of a July 2 notice posted on a website affiliated with the ministry.

Three is the highest security level in Chinese shipping regulations, and one above a warning issued after recent attacks on tankers in the Strait of Hormuz, according to people familiar with the situation, who asked not to be identified discussing government notifications. The ministry wasn’t immediately able to comment.

Things have been pretty calm piracy-wise in the Strait of Malacca in recent years, so this is a head shaker.

Lloyds List Maritime Intel headline says China raises attack threat in Malacca Straits to highest level:

Shipping companies are asked by authorities in Beijing to increase the security level on ships transiting the Straits of Malacca, one of the world’s busiest waterways. Cosco Shipping’s tanker unit has warned its staff about possible attacks from some Indonesian gangs.

But suppose you are China and you decide that the chokepoints through which your vital oil supplies flow are potentially threatened by forces that may attempt to enforce an embargo on - say - Iranian crude oil. After all, 78% of your oil passes through chokepoints.

Given that possibility, and looking to the U.S. Carter Doctrine for a historic parallel, might you decide to gin up a "threat" which would -um - require you to provide armed escort vessels for your tankers heading to and through such chokepoints? What better threat than "Indonesian gangs?"

In short, is this a Chinese setup to intrude in the state waters of Indonesia and Malaysia with warships as a preemptive move against such an embargo and to set the precedent that China can and will do what it wants to protect its "vital national interests" in such chokepoints?

By sending escort ships to protect its tankers China would take another one of those minor steps that seems innocuous but which has major ramifications. They don't even have to be PLAN ships, but could be Chinese Coast Guard ships to begin with.

Messages.

Not a Bad Idea: Trump tells other countries to protect own Gulf shipping

Trump tells other countries to protect own Gulf shipping

President Donald Trump on Monday told other countries to protect their own Gulf oil shipments, declaring that the United States has only limited strategic interest in the "dangerous" region.

In a pair of tweets, Trump said US aims regarding Iran boil down to "No Nuclear Weapons and No Further Sponsoring of Terror."

Stating that the United States is now the world's biggest energy producer, thereby weaning itself off decades of dependence on Middle Eastern oil, Trump said "we don't even need to be there."

And the US military should not be depended upon to keep the narrow sea routes along Iran's coast free.

"Why are we protecting the shipping lanes for other countries (many years) for zero compensation," he asked. "All of these countries should be protecting their own ships on what has always been a dangerous journey."

As for Tehran, Trump said, his only demand is that the country not pursue nuclear weapons and halts what the United States claims is backing for terrorist groups.

"The U.S. request for Iran is very simple," he wrote.
***
Trump's tweets add to his record of seeking a wider draw down of the US diplomatic and military footprint around the world.

Among the nations using oil from the Arabian Gulf area the French and the Brits have shared some of the sea lines of communication protection load, but since 1980 the laboring oar has been the U.S. Navy - which today has more sailors serving in that region of the world than anywhere else.

With the U.S. now perfectly capable of being energy independent, the vital national interest invoked by President Carter in the Carter Doctrine is no more, which is precisely what President Trump stated in his Tweets.

The Iranians count on U.S. reluctance to take Iran directly on or to directly confront Iran's effort to incite trouble throughout the area and to stage its small potato aggravations such as limpet mining ships or shooting down an unarmed drone. It's the "just not worth it" problem the U.S. faces - the aggravation level  of Iran's puny activity doesn't rise to the level of an existential threat to the U.S. Under the Weinberger Doctrine,  unless it does, there is no reason to go to war:

The Weinberger doctrine:

1. The United States should not commit forces to combat unless the vital national interests of the United States or its allies are involved.
2. U.S. troops should only be committed wholeheartedly and with the clear intention of winning. Otherwise, troops should not be committed.
3. U.S. combat troops should be committed only with clearly defined political and military objectives and with the capacity to accomplish those objectives.
4. The relationship between the objectives and the size and composition of the forces committed should be continually reassessed and adjusted if necessary.
5. U.S. troops should not be committed to battle without a "reasonable assurance" of the support of U.S. public opinion and Congress.
6. The commitment of U.S. troops should be considered only as a last resort.

You might note that the "burr under the saddle" approach the Iranians follow never really crosses that line which would justify the U.S. completely destroying Iranian maritime forces of the Iranian Navy or its Iranian Revolutionary Guard or taking out the dictators who head Iran.

Critics of the Weinberger Doctrine might invoke the lessons set out in Colin Powell's December 1992 Foreign Affairs article U.S. Forces: Challenges Ahead
discussing the shift from a Cold War footing for the U.S. military to one based on dealing with "regional contingencies"

THE NEW NATIONAL military strategy is an unclassified document. Anyone can read it. It is short, to the point and unambiguous. The central idea in the strategy is the change from a focus on global war?fighting to a focus on regional contingencies. No communist hordes threaten western Europe today and, by extension, the rest of the free world. So our new strategy emphasizes being able to deal with individual crises without their escalating to global or thermonuclear war.

***
To help with the complex issue of the use of "violent" force, some have turned to a set of principles or a when-to-go-to-war doctrine. "Follow these directions and you can’t go wrong." There is, however, no fixed set of rules for the use of military force. To set one up is dangerous. First, it destroys the ambiguity we might want to exist in our enemy’s mind regarding our intentions. Unless part of our strategy is to destroy that ambiguity, it is usually helpful to keep it intact.

Second, having a fixed set of rules for how you will go to war is like saying you are always going to use the elevator in the event of fire in your apartment building. Surely enough, when the fire comes the elevator will be engulfed in flames or, worse, it will look good when you get in it only to fill with smoke and flames and crash a few minutes later. But do you stay in your apartment and burn to death because your plan calls for using the elevator to escape and the elevator is untenable? No, you run to the stairs, an outside fire escape or a window. In short, your plans to escape should be governed by the circumstances of the fire when it starts.

When a "fire" starts that might require committing armed forces, we need to evaluate the circumstances. Relevant questions include: Is the political objective we seek to achieve important, clearly defined and understood? Have all other nonviolent policy means failed? Will military force achieve the objective? At what cost? Have the gains and risks been analyzed? How might the situation that we seek to alter, once it is altered by force, develop further and what might be the consequences?

As an example of this logical process, we can examine the assertions of those who have asked why President Bush did not order our forces on to Baghdad after we had driven the Iraqi army out of Kuwait. We must assume that the political objective of such an order would have been capturing Saddam Hussein. Even if Hussein had waited for us to enter Baghdad, and even if we had been able to capture him, what purpose would it have served? And would serving that purpose have been worth the many more casualties that would have occurred? Would it have been worth the inevitable follow?up: major occupation forces in Iraq for years to come and a very expensive and complex American proconsulship in Baghdad? Fortunately for America, reasonable people at the time thought not. They still do.

I left that last paragraph in as a reminder that even you are engaging in punitive strikes or limited wars there is always the potential of getting stuck in problems that are not yours to solve, as we now ought to know too well. You want unforeseen consequences? See the effects of the Somalia, Libya and Syria "humanitarian" interventions, though they were of limited scope.

Where's this leave the U.S.? The situation that caused President Carter to make up a doctrine for the Middle East has changed. The reality is that the U.S. has no "vital national interest" in the Arabian Gulf. Whether our "allies" do is unclear - if they do, they should be taking steps to protect them without depending on the U.S. taxpayers to provide that protection through its investment in its own military. We have other things and places to focus our attention on.

President Trump is correct in his statements about what we seek from Iran - no nukes (they threaten U.S. allies) and stop funding terrorism. If the Iranians want peace and security, they know what they have to do to get it.

The message for those who rely on oil shipped out of the Arabian Gulf? Grow up and look after your own interests. As Henry Kissinger said, “America has no permanent friends or enemies, only interests” The American interest in the waters off Iran is dwindling rapidly.

Tanker Attacks Off Iran - Iran's Response to Trade Restrictions?

In what certainly seems an escalating series of "tit for tat" attacks on ships in Arabian Gulf area, Tradewinds News reports Frontline and Schulte tankers attacked off Fujairah:

IRIB News Photos

Two tankers operated by Frontline and Bernhard Schulte have reportedly been the subject of a "torpedo" attack off Fujairah in the UAE, according to broking and ship agency sources on Thursday.

The 110,000-dwt LR2 Front Altair (built 2016) is carrying naphtha produced by Abu Dhabi National Oil Co to Taiwan, having lifted the cargo from Ruwais on 11 June.

According to Taiwan CPC, trading house Ocean Energy has chartered the vessel to transport the cargo to the Taiwanese refiner.

U.S. Fifth Fleet reports:

We are aware of the reported attack on shipping vessels in the Gulf of Oman. U.S. Naval Forces in the region received two separate distress calls at 6:12 a.m. local (Bahrain) time and a second one at 7:00 a.m. The Arleigh Burke-class guided-missile destroyer USS Bainbridge (DDG 96) rendered assistance.

In the background of this is a report of damage to ships in port Iran, as set out in Mysterious Blazes on Six Iranian Ships in Iranian Ports:

IRNA photo

As the strategic port of Shahid Rajaee, north of the Strait of Hormuz, was still dealing with the effects of a huge fire that caused serious destruction, Iranian media reported2 that six Iranian ships were ablaze in several ports in the southern part of the country.3

The Iranian Republic News Agency reported that on June 7, 2019, four merchant ships caught fire in the port of Nakhl Taqi (Taghi) in the Asaluyeh region of Bushehr Province. Three ships were burned entirely, while two others in Asaluyeh suffered major damage. While the governor of Asaluyeh claimed the fires were extinguished without anyone harmed, the head of the emergency rooms in Bushehr Province said that several civilians and sailors had been injured and brought to hospitals in the region. The mayor of the town of Delvar, near the port of Bualhir, confirmed that one vessel in the port burned completely.

Which was, of course, preceded by May 13, 2019, damage to ships in UAE ports US Official: Explosives Blew Holes in Ships off UAE:

UAE photos

A U.S. official says military experts believe explosives blew holes in four ships off the coast of the United Arab Emirates Sunday, and suspects Iran may be involved but they have no proof.

Two of the oil tankers belong to Saudi Arabia, which says the ships suffered "significant damage" in what it and the UAE calls sabotage.

Saudi Oil Minister Khalid al-Falih said the attack was meant to undermine "the security of oil supplies to consumers all over the world."

Yes, well, not the first "tanker war" in the area.

I don't mind pointing fingers at the Iranians or their surrogates, as the situation does seem to show that Iran is a little peeved over sanctions.

Probably not at this stage yet, though:
Of course, the start of WWI comes to mind.

Fun with Iran: Iran "Naval Ambitions"

I think we've covered Iran's desire to control the flow of oil from the Middle East to the world before, but there is an interesting piece at Foreign Affairs by Yoel Guzansky, Iran's Growing Naval Ambitions: Why It Wants Naval Bases in Syria and Yemen that

In late November, Iran made an unusual announcement: it said it was planning to build naval bases in Syria and Yemen, which, as a state-run paper later posited, “could be ten times more efficient than nuclear power.” Although Iran has long striven to establish itself as a leading regional power, and naval outposts have been key to reaching that goal, this was the first time Tehran officially declared its intentions to build such bases beyond its own borders.

That "building bases" part is partially true because there was that time the Greeks beat the expansionist Persians back a couple of thousand years ago.

Ironic, I suppose that it was Greek sea power that played a key role in those Persian defeats, as it appears sea power is back in the Persian - uh- Iranian Islamic Republic Theocracy/Dictatorship vocabulary.

In any event, Mr. Guzansky notes:

The two bases would fit into Iran’s larger plan to expand its reach both regionally and beyond. Tehran is in the process of building up its presence along the coasts of the Persian Gulf and the Gulf of Oman, a policy that it also announced in November. “We are building two naval zones and three naval bases on the Makran coasts,” saidRear Admiral Habibollah Sayyari, commander of the Iranian navy, at a press conference in Tehran. “This is in line with our policy of making a return to the sea.” Sayyari highlighted plans to equip the Iranian navy with homegrown surface-to-surface missiles, sea-based drones, and intercept radars.

Sayyari also made mention, and not for the first time, of Iran’s goals outside its regional waters. “Beyond a doubt,” he said, “our naval fleets will, in the near future, circle Africa and cross the Atlantic.” He referred to the waters of East Asia as well. To further this goal, Iran is conducting visits to and joint naval exercises with countries in Africa and Asia. In May 2013, Iran’s navy paid a visit to the Chinese port of Zhangjiagang, and later that year, it sent two warships and a submarine to Colombo, Sri Lanka. In 2014, China reciprocated by sending, for the first time, two ships to the Iranian port of Bandar Abbas to conduct joint naval exercises, ostensibly focused on antipiracy operations. And in January of this year, Tehran dispatched an Iranian navy destroyer to the Indian port of Visakhapatnam, also to conduct joint naval drills.

See also Missile Attacks Off Yemen and the Iran- Saudi Proxy War for Oil Shipping Chokepoints:

Iran would like to control the Saudi outflow of oil. It can do so by shutting down Saudi access through the Strait of Hormuz except that the Saudi's can also export oil from their west coast on the Red Sea and ship it through the Bab el-Mandeb Strait. If the Iranian surrogate Houthis can gain control of the Bab el-Mandeb Strait then Iran could, effectively, throttle Saudi oil flow.

Not to mention controlling much of the oil flow to Europe and, if necessary, to the Far East. Useful bargaining chip, that oil/gas flow, as Russia has found out in its dealing with Western Europe.

Mr. Guzansky makes other excellent points:

A base in Syria, if it ever materializes, would stretch Iran's naval arm to the Mediterranean and strengthen the Iranian military presence near Europe’s shores. It would also help Tehran’s allies in Lebanon, Palestine, and Syria—Hezbollah, Hamas, and the regime of President Bashar al-Assad, respectively. A naval base in Syria would enable Iran to transport regular supplies and provide other assistance to Hezbollah without being dependent on overland convoys or aerial transport through Iraq or Turkey. The base would also make Iran less dependent on Sudan. Although Sudan has long served as a port of entry for Iranian weapons into the Mediterranean and Africa, Tehran’s African ally has been changing its policy in recent years and has moved closer to wealthy Saudi Arabia.
***
If left unchecked, Iran could potentially develop the capacity to threaten crucial shipping lanes in the Caspian Sea and the Indian Ocean. As a result, Iran’s recent announcements of its plans to expand its regional presence to the Red Sea and the Mediterranean could spur cooperation between Israel, which is also seeking to curb Iranian influence, and the Arab world. For its part, the United States under President Barack Obama has shied away from confrontation with Iran in almost all instances. The U.S. Navy has chosen not to counter the increasing provocations in the Persian Gulf by Iran’s Islamic Revolutionary Guard Corps Navy. As of September 2016, there had been 31 “unsafe encounters” with Iranian vessels in the Persian Gulf, up from 23 in 2015, according to the U.S. Navy. The lack of action is costing Washington its credibility as a counterforce to Tehran.

Of course, while Iran plots its destruction of Israel and its positioning to threaten Europe, the world's energy picture keeps moving which may damage Iran's ability to pay for a meaningful naval expansion. Though with sufficient anti-ship cruise missiles, it seems easier for a land power to push sea forces further out to sea.

Europe is not without options for example

Norway is the world's third largest exporter of oil and gas after Saudi Arabia and Russia. In 2012, it accounted for about 31% of all the EU's natural gas imports and 11% of its crude oil imports. Norway also produces a large amount of hydroelectric power which can be exported to the EU in greater quantities if new grid connections are built.

There are several reasons for the "greening" of Germany, not the least of which would seem to be to free it from the clutches of either Russia or the Middle East powers.

Once again, the U.S. domestic production of oil and gas is vital to U.S. interests - see OPEC Fights U.S. Shale Oil, U.S. Shale Oil Hangs in There:

The U.S., according to the U.S. Energy Information Administration seems to be sitting pretty on shale:

Does the United States have abundant shale resources?
Yes, the United States has access to significant shale resources. In the Annual Energy Outlook 2014, EIA estimated that the United States has approximately 610 Tcf of technically recoverable shale natural gas resources and 59 billion barrels of technically recoverable tight oil resources. As a result, the United States is ranked second globally after Russia in shale oil resources and is ranked fourth globally after China, Argentina and Algeria in shale natural gas resources.

Nhanks to Mr. Obama, we now seem to be "warehousing" areas of potential development.

You might want to look at National Energy Security Issue: Effects of Cheap Oil

Suppose, for example, Russia decides to cut off natural gas supplies to Europe beginning in late 2016 using that gas as an economic weapon to force the nations dependent on Russian gas to accept Russian claims in the Ukraine or the Baltic States. One way for the West to resist this pressure is to have some assurance that the U.S. and its allies will be able to set into motion a stream of LNG ships carrying gas to replace that of the Russians, ameliorating the gas situation for those affected states. In addition to LNG shipping, a force of air and naval escorts protecting that LNG stream at sea might be required to prevent interference with the flow of gas in competition with that of the Russians.

Or, suppose the Chinese interfere with the flow of gas and oil through the South China Sea sea lanes to Taiwan,South Korea and Japan. Can the U.S. and Canada help mitigate the harm while alternative sea lanes that avoid the South China Sea are developed? Who will protect those shipments and how?

Or, what if Iran or someone else takes the big step of managing to destroy the Saudi oil production - say through using nuclear weapons - can the U.S. and non-Middle East producers step up and provide at least minimal supplies to the world now depending on Middle East oil?

Of course, speaking of naval power, all those shipping lanes would require adequate naval forces to protect them from interruption. Another reason to increase the size of the U.S. and allied naval forces.

UPDATE: Some people find Iran's suggested foreign port concept a "mirage":

Iran is doing enough damage in the Middle East through unconventional methods without requiring a robust navy. That is why an idea floated by a key Iranian military leader to build naval bases in Yemen and Syria makes absolutely no sense.

Mohammad Bagheri, the chief of Iran’s armed forces general staff, suggested last month that Tehran was interested in, “at some point,” establishing naval bases in Yemen and Syria. While such a move would reflect the Islamic Republic’s goal of dominating the region, constructing highly visible and defensible bases far from Iranian shores is not realistic.

I agree that "realism" and Iran's stated goals often vary widely.

Missile Attacks Off Yemen and the Iran- Saudi Proxy War for Oil Shipping Chokepoints

Some party to the Yemen "civil war" has been shooting missiles at ships off the Yemeni coast, including unsuccessfully firing a couple at U.S. Navy warships operating off that coast, as reported at Missiles fired from rebel-held Yemen land near Norfolk-based USS Mason and an earlier attack on a former USNS leased vessel, as reported at Former U.S. Navy HSV-2 Swift wrecked in Yemen missile attack.

Why would the "rebels" be doing this?

The "civil war" in Yemen is widely viewed as a Saudi v. Iran proxy war with the U.S. on the side of the Saudis, making it a Iran v.U.S. Proxy war.

map source

Things are pretty much a mess in Yemen as various Shiite and Sunni groups attempt to push the others around in order to gain control of key areas of Yemen. Pretty good explanation from the BBC of Yemen crisis: Who is fighting whom?:

The main fight is between forces loyal to the beleaguered President, Abdrabbuh Mansour Hadi, and those allied to Zaidi Shia rebels known as Houthis, who forced Mr Hadi to flee the capital Sanaa in February. {2015}
***
Yemen's security forces have split loyalties, with some units backing Mr Hadi, and others the Houthis and Mr Hadi's predecessor Ali Abdullah Saleh, who has remained politically influential. Mr Hadi is also supported in the predominantly Sunni south of the country by militia known as Popular Resistance Committees and local tribesmen.
Both President Hadi and the Houthis are opposed by al-Qaeda in the Arabian Peninsula (AQAP), which has staged numerous deadly attacks from its strongholds in the south and south-east.
The picture is further complicated by the emergence in late 2014 of a Yemen affiliate of the jihadist group Islamic State, which seeks to eclipse AQAP and claims it carried out a series of suicide bombings in Sanaa in March 2015.
After rebel forces closed in on the president's southern stronghold of Aden in late March, a coalition led by Saudi Arabia responded to a request by Mr Hadi to intervene and launched air strikes on Houthi targets. The coalition comprises five Gulf Arab states and Jordan, Egypt, Morocco and Sudan.
***
The conflict between the Houthis and the elected government is also seen as part of a regional power struggle between Shia-ruled Iran and Sunni-ruled Saudi Arabia, which shares a long border with Yemen.
Gulf Arab states have accused Iran of backing the Houthis financially and militarily, though Iran has denied this, and they are themselves backers of President Hadi.
Yemen is strategically important because it sits on the Bab al-Mandab strait, a narrow waterway linking the Red Sea with the Gulf of Aden, through which much of the world's oil shipments pass. Egypt and Saudi Arabia fear a Houthi takeover would threaten free passage through the strait.

If you feel you need a scorecard to keep track, you are not alone.

But focus on this - Iran is Saudi Arabia's enemy.

Iran would like to control the Saudi outflow of oil. It can do so by shutting down Saudi access through the Strait of Hormuz except that the Saudi's can also export oil from their west coast on the Red Sea and ship it through the Bab el-Mandeb Strait. If the Iranian surrogate Houthis can gain control of the Bab el-Mandeb Strait then Iran could, effectively, throttle Saudi oil flow.

The chokepoint situation had been discussed here many time, but the U.S.Energy Information Administration has a great site, World Oil Transit Chokepoints which lays these routes out well:

World chokepoints for maritime transit of oil are a critical part of global energy security. About 63% of the world's oil production moves on maritime routes. The Strait of Hormuz and the Strait of Malacca are the world's most important strategic chokepoints by volume of oil transit.
***
The Strait of Hormuz is the world's most important chokepoint with an oil flow of

17 million barrels per day in 2013, about 30% of all seaborne-traded oil.

Located between Oman and Iran, the Strait of Hormuz connects the Persian Gulf with the Gulf of Oman and the Arabian Sea. The Strait of Hormuz is the world's most important oil chokepoint because of its daily oil flow of 17 million barrels per day in 2013. Flows through the Strait of Hormuz in 2013 were about 30% of all seaborne-traded oil.

EIA estimates that more than 85% of the crude oil that moved through this chokepoint went to Asian markets, based on data from Lloyd's List Intelligence tanker tracking service.6 Japan, India, South Korea, and China are the largest destinations for oil moving through the Strait of Hormuz.
***
At its narrowest point, the Strait of Hormuz is 21 miles wide, but the width of the shipping lane in either direction is only two miles wide, separated by a two-mile buffer zone. The Strait of Hormuz is deep and wide enough to handle the world's largest crude oil tankers, with about two-thirds of oil shipments carried by tankers in excess of 150,000 deadweight tons.
***
Pipelines available as bypass options
Most potential options to bypass Hormuz are currently not operational. Only Saudi Arabia and the United Arab Emirates (UAE) presently have pipelines able to ship crude oil outside of the Persian Gulf and have additional pipeline capacity to circumvent the Strait of Hormuz. At the end of 2013, the total available unused pipeline capacity from the two countries combined was approximately 4.3 million bbl/d (see Table 2).

Saudi Arabia has the 746-mile Petroline, also known as the East-West Pipeline, which runs across Saudi Arabia from its Abqaiq complex to the Red Sea. The Petroline system consists of two pipelines with a total nameplate (installed) capacity of about 4.8 million bbl/d. The 56-inch pipeline has a nameplate capacity of 3 million bbl/d, and its current throughput is about 2 million bbl/d. The 48-inch pipeline had been operating in recent years as a natural gas pipeline, but Saudi Arabia converted it back to an oil pipeline. The switch increased Saudi Arabia's spare oil pipeline capacity to bypass the Strait of Hormuz from 1 million bbl/d to 2.8 million bbl/d, but this is only achievable if the system operates at its full nameplate capacity.

Saudi Arabia also operates the Abqaiq-Yanbu natural gas liquids pipeline, which has a capacity of 290,000 bbl/d. However, this pipeline is currently running at capacity and cannot move any additional oil.

The UAE operates the Abu Dhabi Crude Oil Pipeline (1.5 million bbl/d) that runs from Habshan, a collection point for Abu Dhabi's onshore oil fields, to the port of Fujairah on the Gulf of Oman, allowing crude oil shipments to circumvent the Strait of Hormuz. The pipeline can transport more than half of UAE's total net oil exports. The government plans to increase this capacity in the near future to 1.8 million bbl/d.
***
Suez Canal
The Suez Canal is located in Egypt and connects the Red Sea and Gulf of Suez with the Mediterranean Sea. In 2013, total petroleum and other liquids (crude oil and refined products) and LNG accounted for 20% and 3% of total Suez cargoes, measured by cargo tonnage, respectively. The Suez Canal is unable to handle Ultra Large Crude Carriers (ULCC) and fully laden Very Large Crude Carriers (VLCC) class crude oil tankers. The Suezmax was the largest ship capable of navigating through the canal until 2010 when the Suez Canal Authority extended the canal depth to 66 feet to allow more than 60% of all tankers to use the Suez Canal, according to the Suez Canal Authority.15

In 2013, nearly 3.2 million bbl/d of total oil (crude oil and refined products) transited the Suez Canal in both directions, according to the Suez Canal Authority. This is the largest amount ever shipped through the Suez Canal. The majority of the oil was sent northbound (1.9 million bbl/d) toward European and North American markets, and the remainder was sent southbound (1.3 million bbl/d), mainly toward Asian markets.

Oil exports from Persian Gulf countries (Saudi Arabia, Iraq, Kuwait, United Arab Emirates, Iran, Oman, Qatar, and Bahrain) accounted for 79% of Suez Canal northbound oil flows. The largest importers of northbound oil flows through the Suez Canal in 2013 were European countries (68%) and the United States (16%). Oil exports from European countries made up the majority (66%) of Suez southbound oil flows, followed by North Africa (Algeria and Libya combined made up 16%). The largest importers of Suez southbound oil flows through the Suez Canal were Asian countries (74%).

Total traffic through the Suez Canal fell in 2009, and total oil flows dropped to 1.8 million bbl/d, their lowest level in recent years. The decrease in oil flows during that time reflected the collapse in world oil market demand that began in the fourth quarter of 2008, followed by OPEC production cuts (primarily from the Persian Gulf), which caused a sharp fall in regional oil trade starting in early 2009. Egypt's 2011 revolution did not have any noticeable effect on oil transit flows through the Suez Canal. Over the past few years, oil flows through the Suez Canal have increased, recovering from previous lower levels during the global economic downturn.

SUMED Pipeline

The 200-mile long SUMED Pipeline, or Suez-Mediterranean Pipeline, transports crude oil through Egypt from the Red Sea to the Mediterranean Sea. The crude oil flows through two parallel pipelines that are 42 inches in diameter, with a total pipeline capacity of 2.34 million bbl/d. Oil flows north starting at the Ain Sukhna terminal along the Red Sea coast to its end point at the Sidi Kerir terminal on the Mediterranean Sea. SUMED is owned by the Arab Petroleum Pipeline Co., a joint venture between the Egyptian General Petroleum Corporation (50%), Saudi Aramco (15%), Abu Dhabi's International Petroleum Investment Company (15%), multiple Kuwaiti companies (15%), and Qatar Petroleum (5%).16

The SUMED Pipeline is the only alternative route to transport crude oil from the Red Sea to the Mediterranean Sea if ships were unable to navigate through the Suez Canal. Closure of the Suez Canal and the SUMED Pipeline would necessitate diverting oil tankers around the southern tip of Africa, the Cape of Good Hope, adding approximately 2,700 miles to transit from Saudi Arabia to the United States, increasing both costs and shipping time, according to the U.S. Department of Transportation.17 According to the International Energy Agency (IEA), shipping around Africa would add 15 days of transit to Europe and 8-10 days to the United States.18

Fully laden VLCCs going toward the Suez Canal also use the SUMED Pipeline for lightering. Lightering occurs when a vessel needs to reduce its weight and draft by offloading cargo to enter a restrictive waterway, such as a canal. The Suez Canal is not deep enough for a fully-laden VLCC and, therefore, a portion of the crude is offloaded at the SUMED Pipeline at the Ain Sukhna terminal. The now partially-laden VLCC goes through the Suez Canal and picks up the offloaded crude at the other end of the pipeline at the Sidi Kerir terminal.

In 2013, 1.4 million bbl/d of crude oil was transported through the SUMED Pipeline to the Mediterranean Sea, which was then loaded onto a tanker for seaborne trade. SUMED crude flows decreased over the past few years, but the decrease has been offset by more oil transiting northbound via the Suez Canal. Total oil flows via SUMED and the Suez Canal were 4.6 million bbl/d in 2013, 0.1 million bbl/d higher compared with the previous year. Total oil flows via the Suez Canal and SUMED pipeline accounted for about 8% of total seaborne-traded oil in 2013.
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Bab el-Mandeb

Closing the Bab el-Mandeb Strait could keep tankers in the Persian Gulf from reaching

the Suez Canal and the SUMED Pipeline, diverting them around the southern tip of Africa.

The Bab el-Mandeb Strait is a chokepoint between the Horn of Africa and the Middle East, and it is a strategic link between the Mediterranean Sea and the Indian Ocean. The strait 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 Bab el-Mandeb.

An estimated 3.8 million bbl/d of crude oil and refined petroleum products flowed through this waterway in 2013 toward Europe, the United States, and Asia, an increase from 2.9 million bbl/d in 2009. Oil shipped through the strait decreased by almost one-third in 2009 because of the global economic downturn and the decline in northbound oil shipments to Europe. Northbound oil shipments increased through Bab el-Mandeb Strait in 2013, and more than half of the traffic, about 2.1 million bbl/d, moved northbound to the Suez Canal and SUMED Pipeline.

The Bab el-Mandeb Strait is 18 miles wide at its narrowest point, limiting tanker traffic to two 2-mile-wide channels for inbound and outbound shipments. Closure of the Bab el-Mandeb could keep tankers from the Persian Gulf from reaching the Suez Canal or SUMED Pipeline, diverting them around the southern tip of Africa, adding to transit time and cost. In addition, European and North African southbound oil flows could no longer take the most direct route to Asian markets via the Suez Canal and Bab el-Mandeb.

So, it's all about the oil. If Iran can control oil flowing out of the Middle East, it can control prices and, I assume it believes, the behavior of those nations dependent upon that oil.

You know, world domination.

And that's why Yemen.

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