East-West pipeline shows Saudi Arabia’s early move to secure alternative to Hormuz, expert says
Saudi energy expert says the East-West pipeline demonstrates the Kingdom’s foresight in creating an alternative to the Strait of Hormuz.
Key Takeaways
AIYousef Al-Shammari, head of the London College of Energy Economics, said the East-West pipeline is evidence that Saudi Arabia took early steps to establish an alternative route to the straits of Hormuz.
He told Al-Ikhbariya that without the East-West pipeline, oil prices could have reached $200, noting that while global oil price increases have a worldwide impact, Saudi Arabia benefits from a diversified economy and multiple income sources.
Al-Shammari added that Saudi Arabia’s strategy has focused on minimizing the impact of energy crises. In the 1980s, when energy markets became volatile following the Iran-Iraq war, the Kingdom recognized the risks in the straits of Hormuz region and began early planning for alternative routes for the refineries at the straits of Hormuz.
He also highlighted the importance of storage facilities built by Saudi Aramco outside the Kingdom, both in Asia and Europe, which help stabilize oil prices. As a result, even amid concerns about global supply disruptions, Aramco has consistently reassured international consumers.