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MEOG Commentary MEOG
existing exports primarily dispatched from the Gulf terminals at Ras tanura and Ras al-Ju’ay- mah in the Eastern Province.
easy addition
Muajjiz was the terminal for the unused Iraqi Pipeline in Saudi Arabia (IPSA), which was used to transport Iraqi crude to the Red Sea coast until Iraq’s invasion of Kuwait in 1990.
Riyadh assumed control of the pipeline in 2001 as a form of reparations for unpaid Iraqi debts and utilised the conduit to pipe gas to the west of the country.
the IPSA line hooks around Kuwait and joins the route of the East-West pipeline between Riyadh and the supergiant Khurais oilfield, which contains an estimated 20.1bn barrels of crude. It was built in the 1980s as part of Iraqi e orts to continue exports during the Iran-Iraq war. While it has not been used to transport oil for many years, the conversion of the 625-km line would presumably be far swi er to realise than the overhaul of the entire East-West line.
Meanwhile, speaking to MEOG this week, a former Aramco executive noted that the IPSA’s capacity of around 1.65mn bpd would account for more than 75% of the proposed expansion of the cross-country infrastructure and would “likely” feature in al-Falih’s plans.
east-West divide
Saudi exports have been running at 6.8-7.8mn bpd over the past 18 months, with more than 90% of those transiting the Strait of Hormuz.
Shipping crude from its West coast allows Saudi to avoid Hormuz, but while the Suez Canal and the SUMED pipeline o er convenient
routes to the Mediterranean, Aramco has a vital customer base to the east, with China, Japan, South Korea and taiwan collectively importing an average of 3.5mn bpd of Saudi crude Saudi during 2018.
On July 29, China’s General Administration of Customs (GAC) reported that the country imported 1.89mn bpd from Saudi Arabia during June as shipments from Iran dwindled.
Cargoes heading to Asia from Saudi’s Red Sea ports must traverse the Bab-el Mandeb strait, bringing tankers in close proximity with the Iran-backed Houthis in Yemen and presenting Saudi tankers with another chokepoint.
Aramco’s shipping a liate Bahri reported in late July 2018 that two of its vessels carrying Ara- mco crude were attacked by Houthis in the Bab el-Mandeb strait in the Red Sea, with one su er- ing minor damage. Shipments through the key waterway were temporarily halted by Aramco, resuming around 10 days later.
Meanwhile, Saudi reported on July 10 that it had thwarted another Houthi attack in the strait, this time on a merchant ship, though the Yemeni group denied any involvement.
However, it is not just maritime tra c that has been the target of drone strikes. In May, Yem- en’s Houthi militia launched drone attacks on two pumping stations along the East-West pipe- line, which Aramco then closed as a precaution. Other similar attacks have been carried out on civilian facilities, including last week’s bombing of Saudi’s Abha airport.
While Saudi has the luxury of a non-Hor- muz option, the in uence in Iran is no less of a threat in Bab-el Mandeb, despite being around 2,000km from the Islamic Republic.
Map source: Geopolitical Futures
Week 30 30•July•2019 w w w . N E W S B A S E . c o m
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