Iran looks to begin as soon as next month crude oil exports from the Jask terminal on the Sea of Oman, without the need to have tankers travel through the Strait of Hormuz, a top industry official said on Wednesday.
Iran began sending crude oil through the Goureh-Jask Crude Oil Pipeline project, which will allow it to bypass the critical oil chokepoint the Strait of Hormuz, according to Masoud Karbasian, chief executive of the National Iranian Oil Company (NIOC).
"After the oil reaches Jask, which takes less than a month, in the near future, the official opening ceremony and commissioning of this national project will be held in the presence of the President," Karbasian said, as carried by the Shana news service of the Iranian oil ministry.
According to Iran, the pipeline "aims to transfer one million barrels of crude oil per day, store and export it through a new terminal in Jask, and guarantees continuation of Iran's crude oil exports, decentralization of export terminals and their diversification."
The Goureh-Jask pipeline, which was estimated to cost US$2 billion, is 1,100 kilometers (684 miles) long and will carry crude oil from the Goureh oil terminal in the northwest of Iran to the Jask region on the Sea of Oman, without tankers having to pass through the Strait of Hormuz.
In the Persian Gulf, just two oil producers-Saudi Arabia and the United Arab Emirates (UAE)-currently have some (limited) options for bypassing the Strait of Hormuz, where the daily transit in 2018 was 21 million barrels of oil per day, or the equivalent of some 21 percent of global petroleum liquids consumption. Iran, like all others, currently relies on the Strait of Hormuz to get its oil to the market, although most of its sales are currently covert because of the U.S. sanctions.
Meanwhile, Iran is preparing to boost production and exports of crude oil as indirect talks on the nuclear deal with the United States continue to progress, government officials said, as quoted by Bloomberg.
By Tsvetana Paraskova for Oilprice.com
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Comments
It will allow Iranian crude oil exports to bypass the Strait and will also enhance Iran’s geopolitical reach immeasurably by allowing it to be able to use the threat of closing the Strait of Hormuz for political reasons without hindering its own oil exports.
Dr Mamdouh G Salameh
International Oil Economist
Visiting Professor of Energy Economics at ESCP Europe Business School, London