East-West pipeline shows Saudi Arabia’s early move to bypass Hormuz, expert says
Saudi Arabia’s East-West pipeline demonstrates the Kingdom’s foresight in securing oil exports beyond the Strait of Hormuz, an energy expert says.
Key Takeaways
AIYousef Alshammari, head of the London College of Energy Economics, said the East-West pipeline is evidence that Saudi Arabia began early on to establish an alternative route to the Strait of Hormuz.
Speaking to Al-Ikhbariya, Alshammari added that without the East-West pipeline, oil prices would have reached 200 dollars. He noted that while rising oil prices have a global impact, Saudi Arabia benefits from a diversified economy and multiple sources of income.
He explained 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 Strait of Hormuz region and began considering alternative routes for its refineries early on.
Alshammari also highlighted the importance of storage facilities built by Saudi Aramco outside the Kingdom, in both Asia and Europe, which help stabilize oil prices. He said that amid concerns over potential disruptions to global supplies, Aramco has consistently reassured international consumers.