Iran Looks to Reduce Reliance on the Straits of Hormuz with new Oil Terminal

Iran has been feeling increased pressure from US and EU sanctions against its oil industry, and as a result has on more than one occasion threatened to blockade the Straits of Hormuz, the busiest oil shipping channel in the world; a move that could severely disrupt global oil supplies and affect oil prices.    

Now, according to the news agency Shana, Iran has announced that the Iranian Oil Terminals Company (IOTC) plans to build a new oil export terminal on the Gulf of Oman as Bandar Jask, away from the Straits of Hormuz. Pirouz Mousavi, the managing director of IOTC said they also intend to build a pipeline to transport an extra one million barrels of oil per day to the Caspian Sea port of Neka; a move that will give them more exporting options and remove their own reliance on the Straits of Hormuz.

Is it a good sign that Iran has threatened to disrupt global oil supplies by blockading the straits, and is now finding ways to reduce their own use of the straits, so that any incident there wouldn’t affect their own exports?

No specific details have been provided about the dates of completion, the cost of development, or the expected capacity of the new terminal.

Rostam Qasemi, Iran`s Minister of Petroleum, said that despite the reduced demand for Iranian oil around the world, which has caused them to put a lot of their production into storage, the Iranians are seeking to increase its oil production and exports up to 1.5 million bpd by 2016.

By. Charles Kennedy of Oilprice.com