"Bypassing Straight of Hormuz impossible"

I'm making this thread to make more people aware of the possible consequences that this whole child-play in the Straight of Hormuz can cause.

Often I see people here in ATS being a bit rude to other members discussing this things, labeling them as ignorant or even as plain stupid, or the same old "war mongering" accusations. While I do think there are people with wrong concepts on both sides, people (especially from the West) tend to undermine the reality of the whole issue with Iran, wether we are talking about military power, or the possible consequences of closing Hormuz.

Some have argued in the past that we could easily overcome this problem by going after other sources of oil. Saudi Arabia already stated they would "happily" replace Iran when it comes to oil supply. Libya, who suffered a regime change that we all got to watch fairly closely, already stated that their oil production would reach pre-conflict levels around June, making it a nearly perfect oil supplier for the actual countries that are going to be affect by the oil sanctions towards Iran (Italy, France and Spain).

Libya is close enough for shipping to be safe between oil sources and costumers.

So, we already have 2 oil producing countries getting ready to replace Iran when oil sanctions come to effect.

Personally, I've had the impression that this would be sufficient. I even assumed this was all a major plan to isolate Iran further, both diplomatically and economically. But the problem is far more complex, as this article from PressTV (quoting other sources, by the way) states:

"Bypassing Straight of Hormuz impossible", say energy experts

Peter Sand, a chief shipping analyst at The Baltic and International Maritime Council, told Dow Jones that the use of longer alternate routes to carry oil shipments will increase transportation costs and cause oil to eventually reach the market at a time lag and in insufficient quantities.

This is not a sign that oil prices would go through the roof. This also implicates that a lot of the oil supply that is dependent on Iran could actually come to a nearly stand still, since ships carrying oil would take more time and be further between shipments than what the world has been "programmed" to assume, even with oil price speculations.

Implications? Industry and transports would be the most affected. As far as I'm aware, energy-focused oil supply has obviously a higher priority than industry and transport, so I think we can assume that it can be resumed even if this gets worst.

But most industries that need oil to produce their products (from plastic to rubber to other oil derivative products, which are present everywhere) would come to a near stop as they wait for their crude imports to arrive. We are not only looking at major economic losses, but also huge productions implications and stock problems. Lots of products would simply run out of the shelfs because we can't produce enough to replace the need.

And let's not forget transport. Most people assume that with this, they would simply resort to walking or using public transport. But when experts mention transport, they are not only talking about civilian cars. Trucks, trains, ships, everyone would be dependent on single ships arrivals to refuel and transport their cargo.

That translates to a even more serious standing still in industry. It's not only the prime-matter of the industry that isn't arriving, the ones carrying it would also stop.

According to the Dow Jones, the Strait of Hormuz is currently being used by OPEC members Kuwait, Iran, Iraq, Qatar, Saudi Arabia and the UAE to export crude oil.

So basicly, it's not only a strike to western economy, it's also a strike against the countries who profit from selling oil to the west.

All the countries above quoted are allied, cooperative or at least controlled by the U.S., by the way.

The US Energy Information Administration recently reported that about 70 million metric tons of liquefied natural gas has passed through the Strait in January-October 2011.

Paul Domjan, advisor to Securing America’s Future Energy (SAFE), an organization committed to combating US oil dependence, says “most oil that could realistically be diverted through pipelines is 4.5 to 5 million gbpd even in the best-case scenario.”

When you see numbers like 70 million coming down to 4 to 5 million gas barrels per day, it's time to get concerned. Especially since he mentions using existing alternative routes in case of the Straight is closed.

Experts at Barclays Capital financial institution note that although alternative routes for crude exist, “they are limited in capacity (and) in many cases aren’t currently operating or operable, and generally engender higher transport costs and logistical challenges.”

One possible alternative is to use export terminal at the Red Sea port at Yanbu, where a pipeline carrying the Iraqi oil terminates, SAFE’s Domjan said.

He added, “From there crude would either move through the congested Suez Canal…or through the Gulf of Aden, which would be putting 2 million barrels of oil through the most pirate-infested part of Africa, the costs of protecting it would be massive.”

So, there aren't only few options to overcome the problem, but to actually shift the oil flow to those alternatives would mean a whole re-structuring of the oil flow system, causing billions in loss of profit across the globe.

Can you imagine pirates getting hold of oil super-tankers? They wouldn't even care to take hostages. The oil alone is enough of a reward, if they can transport it or sell it.

The remaining pipeline options, according to experts, are either deactivated, such as the Iraq-Turkey pipeline to the Mediterranean port of Ceyhan, or still hypothetical in the case of the Abu Dhabi pipeline.

Not very optimistic.

And for those who claim Iran would suffer the most with the closing of the Straight, here is your cherry on top of the cake:

“Coincidentally, the (only) oil exporting country that is in the best position to bypass the Strait of Hormuz is Iran, which has a pipeline network in place to enable the theoretical pumping of crude north to the Caspian Sea, from where there are plenty of options to export,” Domjan said.

So, Iran not only has the power to close the Straight, if they make a serious enough effort, but they also have alternatives in terms of economic consequences. And who would have guessed, those alternatives are Russia and possibly China.............

Be careful for what you wish for, and start waking up people.

That is why it is vital the Strait remain, NOT ONLY open, but also INTACT.

There's only a two mile stretch of water that the Oil Tankers can fit through... if the bottom of the strait was somehow messed up... that would take YEARS of Re-Charting.

It would be devastatinly bad for just about the price of Everything.

reply to post by Tifozi


We've got our eyes on developing oil and other natural resources in Central Africa. Uganda, Sudan, South Sudan etc.. Everyone knows the vast resources are there. The problem is security and political instability and violence in the entire region. We currently have at least 100 spec ops troops operating out of Uganda on a US govt. approved and Obama signed mission to kill or capture Joseph Kony. The leader of the violent LRA. Eliminating him and silencing the LRA is just step one in securing the region to the point where crews can successfully set up and operating Drilling and mining operations.

Resources can then be mainlined right out to the Arabian Sea and Beyond. No more Persian Gulf.

What is happening in that area is quite interesting

www.abovetopsecret.com...

There is a lot of money waiting to be made by investors in that region.

Originally posted by truthinfact
That is why it is vital the Strait remain, NOT ONLY open, but also INTACT.

There's only a two mile stretch of water that the Oil Tankers can fit through... if the bottom of the strait was somehow messed up... that would take YEARS of Re-Charting.

It would be devastatinly bad for just about the price of Everything.

Yes, navigating that Straight can be so tricky that shipping companies hire local navigation experts to help captain's navigate through it. Similar to what happens in Canals like Suez.

reply to post by jibeho


You are right, but even with those alternatives, it would take at least a decade to have a decent platform to extract, transport and sell oil.

In case the closing of the Straight does happen, we are looking at a timeline of 2, 3 or 4 months in the worst case scenario.

Thanks for the thread. I hope it helps explain why this isn't just a trivial issue and matters a great deal. I was just in a heated debate a couple days ago with someone on another site who was insisting Saudi Arabia would simply divert oil shipments to Red Sea ports. I was surprised at how much effort and work it took to show this guy that not only do those pipelines not exist in the real world, but if they did, they couldn't possibly handle the divert volumes we're talking about here.

Piplines, Oil/Gas Fields and Refinieries of the Middle East

That map is zoomable and at close detail, it shows by numbers what the capacity is for every pipeline and refinery in the region. It also shows how it simply cannot by diverted out of the Gulf to other places. If Iran closes the straight by fouling the passage, we're ALL screwed, indeed.

Here is a scenario too. Iran can simply go sink a few BIG derelicts into the middle of the shipping lanes. No military force can prevent that and every U.S. Carrier on Earth can't do a thing to help clear the lanes. It's closed for business for weeks or months.....and it doesn't even take ongoing effort to keep it that way.

Lets hope cooler heads prevail here somewhere. As much as the U.S. Government seems to love the idea of just making Iran sound like 3rd world morons...they aren't and they CAN screw the world really hard if they feel pushed hard enough.

This piece of information is TOTALY COINCIDENTAL by the way

But the only existing gas pipeline from the middle east runs from.......wait for it......IRAQ! and where does it go on its way to Europe via Turkey you might wonder........SYRIA!!!!!

Oil and Gas pipelines however have NOTHING AT ALL to do with whats going on in the world right now. Terrorism is whats happening, thats whats causing the problems. Absolutley NOTHING TO DO non western allies in charge of EXTREMELY PROFITABLE oil and gas routes.

Oh and any new "proposed" oil or gas pipelines that just so happen to be planned smack bang through the middle of any of the nations we are currently about to wage war on IS A TOTAL COINCIDENCE

reply to post by Wrabbit2000

I was surprised at how much effort and work it took to show this guy that not only do those pipelines not exist in the real world, but if they did, they couldn't possibly handle the divert volumes we're talking about here.

Often I'm faced with the same "task".

It seems that people are to focused on liking or hating countries, instead of getting to know them. Personally, I was actually pretty "hostile" towards Iran in past years. But in more recent times, I got to know the country a little bitter, and I started to make the most important thing anyone, as a citizen of a nation or the world, should do: question yourself and your information.

And I started to see a clear pattern. Iran is more demonized than the threat it actually poses with it's intentions.

All I've seen from Iran is a colossal effort in becoming a super-power in the Middle East. They want to grow, they don't want death. Yes, it would be pretty handy if Israel would be shut down or simply shut up, but haven't we (westerns) said the same thing as for Russia, North Korea, or any other western enemy?

If they are on the other side of the fence, is that much irrational to assume they don't like us either?

People forget that countries still have the freedom to not like each-other. We have something called cultures, who are different from country to country, and people need to learn how to respect that..

Fighting ignorance is a very hard thing to do.

Iran can simply go sink a few BIG derelicts into the middle of the shipping lanes. No military force can prevent that and every U.S. Carrier on Earth can't do a thing to help clear the lanes. It's closed for business for weeks or months.....and it doesn't even take ongoing effort to keep it that way.

I avoid stating strategies, since nobody knows what Iran plans to do but them-selfs... But yes, there are quite a few options on the table that are easy to do and within Iran capabilities.

Like I said, people tend to underestimate that region and countries like Iran.

Thanks for the post with the info!

It would be expensive, but you could build a pipeline for an offshore station to be used for filling the supertankers.

It would take time and money but then the threat of Iran to close the strait would be reduced.

Originally posted by Wildbob77
It would be expensive, but you could build a pipeline for an offshore station to be used for filling the supertankers.

It would take time and money but then the threat of Iran to close the strait would be reduced.

Yes, like I answered to a previous poster(and is even stated in the OP), the possibilities do exist for alternative oil supplies, in case Iran puts the cork in the Straight.

But the main issue is divided in two parts:

1- We are in a world with economic recession. Spending billions re-structuring oil lines and supply routes isn't really a choice most governments are even capable of doing. Cases like Spain come to mind when those realities emerge. Besides being expensive, those who would be spending the money can't really afford it, maybe even with external help.

2- That takes time. Time that nobody has. The threat of closing the Straight is placed in July, when sanctions come to full effect regarding Iran oil. That's just around the corner. There is no possible way alternatives could be set into place in that time period.

Actually, those alternatives are only being consider IF such a bad thing happens, what could actually mean that we are talking about months or even years after the straight is closed. And that only means one thing:

months or years without proper oil supply. And the most "interesting" detail about this, is that Iran would still be able to supply countries like China and Russia. Scary to say the least.

reply to post by Tifozi


They are moving fast in Uganda.

The discovery of oil in western Uganda could spell an end to poverty in the country within decades, according to President Yoweri Museveni. Exports are predicted to provide $2bn annually, and have the potential to transform the lives of the 40% of Ugandans who live on less than $1.25 per day.

But in Hoima district, plans for a new refinery that will displace 30,000 residents are causing concern rather than celebration.

www.guardian.co.uk...

About 3 billion barrels of untapped oil.

In the first half of 2010, Tullow progressed a series of transactions to align interests and accelerate development of the Lake Albert Rift basin which culminated in the purchase of Heritage Oil and Gas Limited's ("Heritage") interests in EA-1 and EA-3A on 26 July. The process to subsequently farm-down interests to CNOOC and Total, with each partner taking a one third interest in EA-1, 2 and 3A, was signed on the 29th March 2011, following the signing of a MoU between Tullow and the Government of Uganda on 15 March 2011.

A gross 1.1 billion barrels of oil (P50) has already been discovered in the Lake Albert Rift Basin. With many prospects still to be drilled, Tullow believes the basin has an additional 1.4 billion barrels of oil (P50) yet to find.

Tullow Oil
www.tullowoil.com...

ANother good article on the topic of alternate sources of oil in Uganda and Africa as a whole. Even George Soros could have a had in this.

rollingout.com...

reply to post by Tifozi

How would one close the straits? Sink how many ships?

Try Google earth on Alexandria Bay New York, an area called Thousand Islands (there are more than 1000). They are not super tankers but large ocean going ships pass thru channels less than a quarter mile wide, often within 50 feet of houses on small islands.

Originally posted by oghamxx
reply to post by Tifozi

 

How would one close the straits? Sink how many ships?

Try Google earth on Alexandria Bay New York, an area called Thousand Islands (there are more than 1000). They are not super tankers but large ocean going ships pass thru channels less than a quarter mile wide, often within 50 feet of houses on small islands.

During World War II we have seen how deadly an offensive strike against civilian ships can be. Just one German U-Boat Captain was able to sink more than 200,000 tons worth of shipping (cargo not included in those estimates).

Experts claim that if Hitler had paid more attention to his own submarine program, he would be able not just to take the UK, but cripple most powers that in the end caused his fall.

I'm not saying the same thing is going to happen in the Straight of Hormuz, nor that the german genius behind warfare machinery is the same as the iranian, but, at the time, nobody saw this tubes that went underwater and fired torpedos as a major threat to world trade routes.

If the iranians are clever enough, they can find a way to sink those ships. Not military, but civilian. It was only when the UK, Canada and US started escorting their boats in formation (convoy), and started to equip their boats with superior anti-submarine measures, that the Nazi started to even feel an itch regarding the battle for ocean supremacy.

I never claimed that if Iran tries to close the Straight, that they will inevitably succeed. But this is a tricky situation, because, even if Iran fails to close it, that means that they were engaged in combat, which actually means that a war just started.

Not the most pleasant outcome, is it?

reply to post by Tifozi

Not at all pleasant to think about and the sinking of a ship is an easy false flag operation (remember the Maine). If "WE" want a war and Iran does not it would be a no brainer to claim they started it

Yes, navigating that Straight can be so tricky that shipping companies hire local navigation experts to help captain's navigate through it. Similar to what happens in Canals like Suez.....(These are called pilots, and are mandatory for foriegn ships in most any harbour or tricky place to navigate).......nothing special there.....
Mexico, Canada,and a few other countries could possibly step up production somewhat.......The Saudi Kingdom has offered....
It is not anticipated to be a protracted struggle to destroy the infrastructure of Iran sufficiently by use of air power,
the objective would be to bomb them into a state of third world infrastructure....thatll take a while to come back from...
By then the world will be a different place....

All Iran has to do is try their hardest to shut down the strait while simultaneously raining bombs on the suez canal to destroy the entire shipping lane to the west. I bet the Suez canal being targeted with ballistic missile attacks would be their trump card.