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Thursday 17 Aug 2017 | 14:07 | SYDNEY
Thursday 17 Aug 2017 | 14:07 | SYDNEY

Not-so-dire Straits of Hormuz

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25 September 2008 11:21

A worst case scenario often invoked in the event of an attack against Iran’s nuclear facilities is the Islamic Republic’s closure of the economically vital Straits of Hormuz, through which 20% of the world’s oil passes. Regardless of whether Iran is capable of carrying out such an action, the possibility would be enough to put upward pressure on oil prices.

The Gulf states are particularly mindful of the vulnerability of the Straits of Hormuz, but have had few alternatives to date. Although the majority of Saudi exports go through Ras Tanura on the Persian Gulf it also has the capability to export through the Red Sea port of Yanbu. The UAE has also created alternatives: Abu Dhabi has started work on a 370km pipeline from its onshore fields to the oil export terminal in the neighbouring emirate of  Fujairah on the Gulf of Oman.

 Now comes news that the UAE may be considering an even more ambitious project – a 180km canal from Dubai to Fujairah capable of taking oil tankers. In a country which is a byword for impressive and expensive architectural projects, it will be interesting to see whether fear of an Iranian economic blockade of the straits of Hormuz is enough to get this project off the ground and through the Hajar mountains.

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