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As tensions in the Middle East continue to escalate with Iran threatening to choke off shipments through oil’s most critical chokepoint, the Strait of Hormuz, two countries are looking for a workaround to avoid the Strait in the event of a closure, according to an Iraqi lawmaker said on Wednesday, cited by Kurdistan24.
Regardless of how unlikely it may be that Iran make good on its threat to close the Strait of Hormuz should the United States effectively bring Iran’s oil exports to zero, the countries that rely on the shipments through the Strait are working in the background, pre-emptively finding a way around should the worst-case scenario come to fruition.
Qatar and Kuwait have both approached Iraq, proposing to use Iraq “as an alternative path for oil transport” should the need arise, through the Iraqi pipeline.
On Tuesday, Iraqi Prime Minster Adil Abdul-Mahdi suggested that it would be possible to move Iraqi oil through the Kurdistan region to the Port of Ceyhan in Turkey.
Threatening to close off the Strait of Hormuz is a particularly mouthwatering prospect that sees about 18.5 million barrels per day of oil through its narrow passage, according to the EIA, about 80% of which heads to Asian markets.
"According to international law, the Strait of Hormuz is a marine passageway and if we are barred from using it, we will shut it down. In case of any threat, we will have not even an iota of doubt to protect and defend the Iranian waters. We will defend our prestige and embark on reciprocal acts when it comes to defending Iran's right," Iranian Fars news agency quoted Navy Rear Admiral Alireza Tangsiri, Commander of the Islamic Revolution Guards Corps (IRGC) as saying last month.
By Julianne Geiger for Oilprice.com
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Julianne Geiger is a veteran editor, writer and researcher for Oilprice.com, and a member of the Creative Professionals Networking Group.