The following presents information on major world oil transit centers. Over 30 million barrels/day pass through the relatively narrow shipping lanes and pipelines discussed below. These routes are known as chokepoints due to their potential for closure. Disruption of oil flows through any of these export routes could have a significant impact on world oil prices.
Bab el-Mandab
Location: Djibouti/Eritrea/Yemen; connects the Red Sea with the Gulf of Aden and the Arabian Sea
Oil Flows (1997E): 3.3 million barrels/day
Destination of Oil Exports: Europe, United States, Asia
Main Concerns: Closure of the Bab el-Mandab could keep tankers from the Persian Gulf from reaching the Suez Canal/Sumed Pipeline complex, diverting them around the southern tip of Africa (the Cape of Good Hope). This would add greatly to transit time and cost, and effectively tie up spare tanker capacity. In December 1995, Yemen fought a brief battle with Eritrea over Greater Hanish Island, located just north of the Bab el-Mandab.
The Bab el-Mandab could be bypassed by utilizing the East-West oil pipeline, which traverses Saudi Arabia and has a capacity of about 5 million barrels/day. However, southbound oil traffic, which totaled about 1,000,000 barrels/day in 1997, would still be blocked. In addition, closure of the Bab el-Mandab would effectively block non-oil shipping from using the Suez Canal, except for limited trade within the Red Sea region.
Bosporus/Turkish Straits:
Location: Turkey; this about 28 km /17-mile long waterway divides Asia from Europe and connects the Black Sea with the Mediterranean Sea
Oil Flows (1998E): 1.7 million barrels/day (0.2 million barrels/day eastbound).
Destination of Oil Exports: Western and Southern Europe;
Main Concerns: Only half a mile wide at its narrowest point, the Turkish Straits are one of the world's most difficult-to-navigate waterways. Many of the proposed export routes for forthcoming production from the Caspian Sea region pass westwards through the Black Sea and the Turkish Straits en route to the Mediterrean Sea and world markets.
The ports of the Black Sea, along with those in the Baltic Sea, were the primary oil export routes of the former Soviet Union, and the Black Sea remains the largest outlet for Russian oil exports. Exports through the Turkish Straits have grown since the breakup of the Soviet Union in 1991, and there is growing concern that projected Caspian Sea export volumes exceed the ability of the Turkish Straits to accommodate the tanker traffic. Turkey is concerned that that the projected increase in large oil tankers would pose a serious navigational safety and environmental threats to the Turkish Straits.
Panama Canal and Trans-Panama Pipeline:
Location: Panama; connects the Pacific Ocean with the Caribbean Sea and Atlantic Ocean
Oil Flows (1998): 0.6 million barrels/day
Main Concerns: The Panama Canal extends approximately 80 km / 50 miles from Panama City on the Pacific Ocean to Colon on the Caribbean Sea. Petroleum was the second largest commodity (by tonnage) shipped through the Canal after grain, and accounted for 16 percent-17 percent of total canal shipments during fiscal years 1996-1998.
Over 60 percent of total oil shipments went south from the Atlantic to the Pacific, with oil products dominating southbound traffic. Some coal is shipped through the canal as well, accounting for 5 percent -6 percent of total Canal traffic.
If transit were halted through the Canal, the 860,000 barrels/day Trans-Panama pipeline (Petroterminal de Panama, S.A.) could be re-opened to carry oil in either direction. This pipeline is located outside the Canal Zone near the Costa Rican border, and runs from the port of Charco Azul on the Pacific Coast (near Puerto Armuelles) to the port of Chiriqui Grande, Bocas del Toro on the Caribbean. Interest has been shown by Caribbean producers in plans to reverse the pipeline to go southbound from the Atlantic to the Pacific. This reversal would allow increased oil production from Caribbean producers to find outlets on the West Coast and other Pacific markets.
Russian Oil and Gas Export Pipelines/Ports:
Location: Russian oil and gas exports transit via pipelines that pass through Russia, Ukraine, Belarus, Hungary, Slovakia, the Czech Republic, and Poland,
Major Oil Export Ports: Novorossiisk (Russia); Ventspils (Latvia); Odessa (Ukraine), Tuapse (Russia)
Major Oil Pipeline (capacity): Druzhba (1.25 million barrels/day )
Major Natural Gas Pipelines (capacity): Brotherhood, Progress, and Union (1 trillion cubic feet -- tcf -- each); Northern Lights (0.8 tcf); Volga/Urals-Vybord, Finland (0.1 tcf).
Destination of Oil and Gas Exports: Eastern Europe, Netherlands, Italy, Germany, France, other Western Europe.
Main Concerns: Russia is a major supplier of crude oil and natural gas to Europe. All of the ports and pipelines (with the exception of the Druzhba oil pipeline) are operating at near capacity, leaving limited alternatives if problems arose at Russian export terminals.
Strait of Hormuz:
Location: Oman/Iran; connects the Persian Gulf with the Gulf of Oman and the Arabian Sea
Oil Flows (1998E): 15.4 million barrels per day
Destination of Oil Exports: Japan, United States, Western Europe
Issues and concerns: By far the world's most important oil chokepoint, the Strait consists of 3.2 km / 2-mile wide channels for inbound and outbound tanker traffic, as well as a 2-mile wide buffer zone.
Closure of the Strait of Hormuz would require use of longer alternate routes (if available) at increased transportation costs. Such routes include the 5 million barrels/day capacity Petroline and the Abqaiq-Yanbu natural gas liquids line across Saudi Arabia to the Red Sea.
Strait of Malacca:
Location: Malaysia/Singapore; connects the Indian Ocean with the South China Sea and the Pacific Ocean.
Oil Flows (1997E): 9.5 million barrels/day
Destination of Oil Exports: Japan, South Korea, China, other Pacific Rim countries.
Main Concerns: The narrowest point of this shipping lane is the Phillips Channel in the Singapore Strait, which is only 1.5 miles wide at its narrowest point. This creates a natural bottleneck, with the potential for a collision, grounding, or oil spill.
If the strait were closed, nearly half of the world's fleet would be required to sail farther, generating a substantial increase in the requirement for vessel capacity. All excess capacity of the world fleet might be absorbed, with the effect strongest for crude oil shipments and dry bulk such as coal. Closure of the Strait of Malacca would immediately raise freight rates worldwide.
Suez Canal and Sumed Pipeline:
Location: Egypt; connects the Red Sea and Gulf of Suez with the Mediterranean Sea
Oil Flows (1998): 3.1 million barrels/day. Of this total, the Sumed Pipeline transported 2.4 million barrels/day of crude oil northbound (2.2 million barrels/day from Saudi Arabia); and Iran).
The Suez Canal transported 0.7 million barrels/day of petroleum in 1998. Southbound trade consisted of 0.1 million barrels/day of petroleum products. Northbound trade consisted of 0.6 million barrels/day of petroleum, half of which was crude oil.
Destination of Sumed Oil Exports: Predominantly Europe; also United States.
Main Concerns: Closure of the Suez Canal and/or Sumed Pipeline would divert tankers around the southern tip of Africa (the Cape of Good Hope), adding greatly to transit time and effectively tying up tanker capacity.
Source: United States Energy Information Administration.
© 2000 Mena Report (www.menareport.com)
