Iran: We Will Be “Guardian Of Security” In Gulf, Strait Of Hormuz

Despite Iran’s assurances to Iraq, there is a real danger that if attacked or if its crude oil exports were prevented from passing through the Strait of Hormuz, Iran could block or mine the Strait of Hormuz so as to disrupt other Gulf countries’ oil exports including Iraq’s.

Moreover, it could launch a kind of hybrid war – both directly and through its proxies – carrying out sporadic and widely dispersed attacks on shipping and other targets, sending oil prices, shipping costs and insurance premiums steeply up.

Iraq is totally dependent on the Strait of Hormuz for its oil exports since the Iraqi-Turkish pipeline known as the ITP transporting Iraqi oil from Kirkuk to Ceyhan on the Turkish coast on the Mediterranean is currently out of action.

Iraq now aims to increase its crude oil production from 4.6 million barrels a day (mbd) currently to 6.2 mbd by the end of 2020 and 9 mbd by 2023. Ongoing infrastructure constraints, however, may continue to thwart the realisation of these ambitions on schedule.

Still, a major rise in Iraq’s oil production has to go hand in hand with an expansion of its oil infrastructure particularly oil pipelines and export terminals on the Gulf. Current Iraq’s export capacity is 3.8 mbd through terminal on the Gulf.

Therefore, Iraq should very urgently consider extending the Iraq strategic oil pipeline to the Jordanian port of Aqaba on the Red Sea, enhancing its Gulf terminals to more than 5 mbd and also reaching an accommodation with the regional government of Iraqi Kurdistan to rehabilitate the ITP.

Additionally, a new pipeline extending from Iraq’s southern oilfields across Syria to the Mediterranean could be considered once the civil war is over.

Dr Mamdouh G Salameh
International Oil Economist
Visiting Professor of Energy Economics at ESCP Europe Business School, London