Will Iran Close Hormuz?

Well? There have been threats in the past but they have remained threats. This time things look different for various reasons but it could be hindsight interfering with my powers of observation.

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2 hours ago, Marina Schwarz said:

Well? There have been threats in the past but they have remained threats. This time things look different for various reasons but it could be hindsight interfering with my powers of observation.

I'm certainly not a geopolitical expert, but that is a HUGE choke point for oil. It would upset the entire goings on in the middle east. Iran's neighbors would never allow that, I don't think.

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A couple of articles:

http://www.thedrive.com/the-war-zone/17983/us-and-uae-drilling-to-move-cargo-over-land-to-circumvent-volatile-strait-of-hormuz

https://www.washingtontimes.com/news/2018/may/2/iranian-navy-lies-low-strait-hormuz-us-military-un/

Be sure to read the Conversation at the end of the Washington Times article.  My fellow Americans speaking to each other.  Comforting, isn't it?

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And here is a snapshot for viewing the ports around Saudi:

image.png.779d727d2962468545ef90ff7e49f08d.png

Perhaps some of the more informed on the forum can explain the realities as they stand today?  Are the Red Sea ports operational?  If so, what % of outgoing product can/could go via the Red Sea ports?

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Closing Ormuz is the nuclear option to use only as a last resort.

For now I think Iran will stick to its current strategy : playing the good guy bullied by the bad guy.

Rouhani is on tour in Europe visiting Switzerland (representing US interests in Iran) and Austria ( that just took over the European Union's six-month rotating presidency). He is desperately trying to get some support but get only "We are sorry for you but we are afraid of the bad guy and can do nothing to help you."

https://www.thelocal.ch/20180703/iranian-president-makes-official-visit-to-switzerland

 

 

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6 hours ago, Dan Warnick said:

And here is a snapshot for viewing the ports around Saudi:

image.png.779d727d2962468545ef90ff7e49f08d.png

Perhaps some of the more informed on the forum can explain the realities as they stand today?  Are the Red Sea ports operational?  If so, what % of outgoing product can/could go via the Red Sea ports?

 

The EIA websites states that the Yanbu terminal on the Red Sea has a 6.6 million b/d loading capacity so I suppose it could handle half of the exports if the East-West pipeline has enough capacity. However it seems that only Arab Light crude oil grade is loaded at the Yanbu terminal.

But I'm not sure we can fully trust the EIA. They say Saudi Arabia's total crude oil export and loading capacity is about 13 million b/d but when we add the capacity of the ports we get a higher number.

Ras Tanura 6.5 millions b/d + Ras al-Ju'aymah 3.12 million d/d + Yanbu 6.6 million b/d =  16.2 million b/d

Perhaps the Yanbu number already include the expected added capacity of the overhauled Muajjiz oil terminal ?

 

If someone has more accurate  numbers feel free to add them.

 

 

 

Quote

 

From the EIA website https://www.eia.gov/beta/international/analysis.php?iso=SAU

Saudi Arabia's total crude oil export and loading capacity is about 13 million b/d. Most of this capacity comes from its four primary oil export terminals:

  • The port of Ras Tanura on the Persian Gulf is Saudi Arabia's primary port. This facility,the world's largest offshore oil exporting port, has a combined handling capacity of about 6.5 million b/d. All of Saudi crude oil grades load at this port, along with condensate and products. The port comprises three terminals: Ras Tanura terminal, Ju'aymah crude terminal, and Ju'aymah LPG export terminal.[20]
    • The Ras Tanura terminal, the largest terminal at the port of Ras Tanura, has an average handling capacity of 3.4 million b/d[21] and 33 million barrel storage capacity.[22] The terminal can accommodate tankers up to 500,000 deadweight tons (dwt). All of Saudi Arabia's crude oil grades are loaded at the Ras Tanura terminal.
    • The Ras al-Ju'aymah terminal has an average handling crude oil capacity of about 3.12 million b/d,[23] and because of the availability of six single-point mooring buoys, the terminal can accommodate some of the largest tankers (700,000 dwt) for crude loadings.[24] All of Saudi Arabia's crude grades are loaded at this terminal, along with bunker fuel (at a maximum loading capacity of 120,000 b/d).[25]
  • The Yanbu King Fahd terminal on the Red Sea, from which most of the remaining volumes are exported, has a loading capacity of 6.6 million b/d.[26] The terminal includes seven loading berths and can accommodate tankers up to 500,000 dwt. Total crude oil storage capacity at the terminal is 12.5 million barrels. Only Arab Light crude oil grade is loaded at the Yanbu terminal.[27]

In addition to these primary export terminals, Saudi Arabia has other smaller ports, including Ras al-Khafji, Jubail, Jizan, and Jeddah.

Saudi Aramco plans to begin exports from the overhauled Muajjiz oil terminal on the Red Sea sometime before the end of 2017, which would raise Saudi Arabia's total loading and export capacity to about 15 million b/d. Before the Iraqi Pipeline in Saudi Arabia (IPSA) was converted to a natural gas line, Muajjiz was used as an export terminal for the Iraqi crude oil that flowed through the IPSA. Muajjiz will be integrated into the Yanbu crude oil terminal.[28]

 

 

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Iran closing Hormuz would collaspe the world economy over a few months. Such a move would galvinize most of the world in retaliation. Maybe before a collaspe.

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6 hours ago, Guillaume Albasini said:

Closing Ormuz is the nuclear option to use only as a last resort

 

Agree. I'm wondering how close to the edge is Trump gong to push them. It's interesting, though, isn't it? Close one major oil route and the global economy collapses. Not very good news for the renewables industry.

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6 hours ago, Guillaume Albasini said:

But I'm not sure we can fully trust the EIA. They say Saudi Arabia's total crude oil export and loading capacity is about 13 million b/d but when we add the capacity of the ports we get a higher number.

Ras Tanura 6.5 millions b/d + Ras al-Ju'aymah 3.12 million d/d + Yanbu 6.6 million b/d =  16.2 million b/d

I have been let to believe the 16.2 MB/D is accurate.  (A source that claims to have a source on the ground, unconfirmed by me, of course.)  If that is true, media and supposed reliable sources reporting is off by 2-3 MB/D.  Logically speaking, it only makes sense that the Saudis, supported by other concerned parties, would want to duplicate and/or expand their current capabilities to the Red Sea side.  There was also reportedly a great deal of study and discussion to expand as per the following illustration:

image.png.c67987b0a96428046973202038d3a2cc.png

This illustration, if it were to ever become reality, would essentially take away one of Iran's major threats right off the Iranian coast.

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44 minutes ago, Dan Warnick said:

image.png.c67987b0a96428046973202038d3a2cc.png

And once again, Qatar gets ignored by KSA.

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43 minutes ago, Tom Kirkman said:

And once again, Qatar gets ignored by KSA.

Including Qatar would not bypass the Hormuz, though.

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5 minutes ago, Dan Warnick said:

Including Qatar would not bypass the Hormuz, though.

Whoops, you are correct.  I was just looking at the planned pipeline spiderweb, and saw that Qatar remained isolated.

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2 minutes ago, Tom Kirkman said:

Whoops, you are correct.  I was just looking at the planned pipeline spiderweb, and saw that Qatar remained isolated.

Yeah, I knew you were referring to other issues with your answer.  Perhaps that would be another good topic, since I know so, so little about it:  Saudi and Qatar - Bad Blood Explained?

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17 minutes ago, Dan Warnick said:

Yeah, I knew you were referring to other issues with your answer.  Perhaps that would be another good topic, since I know so, so little about it:  Saudi and Qatar - Bad Blood Explained?

The feuding "cousins" will likely remain feuding.  Here's a 6 month old article that covers a lot of background:

Game of Thobes: how an Arab family feud has thrust Qatar into the fight of its life

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19 hours ago, Marina Schwarz said:

Well? There have been threats in the past but they have remained threats. This time things look different for various reasons but it could be hindsight interfering with my powers of observation.

In my view, Iran's interests will be bolstered by preserving regional security and free flow of oil to consuming nations. In this role, Iran wish to diminish confrontation with the regional countries as well as the world countries as a whole. At the same time, the world and especially the developing world have become gradually more dependent on the Persian Gulf oil. So, I don't think Iran will close the Hormuz since Iran can indeed be regarded as the country that has thoroughly and heavily experienced the politico- economic and social repercussions of war.

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11 minutes ago, Mahyar said:

In my view, Iran's interests will be bolstered by preserving regional security and free flow of oil to consuming nations. In this role, Iran wish to diminish confrontation with the regional countries as well as the world countries as a whole. At the same time, the world and especially the developing world have become gradually more dependent on the Persian Gulf oil. So, I don't think Iran will close the Hormuz since Iran can indeed be regarded as the country that has thoroughly and heavily experienced the politico- economic and social repercussions of war.

I for one certainly hope that Iran acts as you outline.  For most of my life I have been hearing what it is that they have been trying to sell (not the oil part) and after all these years it still doesn't work.  Join the world, discuss differences and work through them.  Mr. Trump may wish to consider this advice, too.  :)

 

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6 hours ago, Tom Kirkman said:

The feuding "cousins" will likely remain feuding.  Here's a 6 month old article that covers a lot of background:

Game of Thobes: how an Arab family feud has thrust Qatar into the fight of its life

Very interesting article, indeed.  What intrigue.  People with too much money and time on their hands.......

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On 7/3/2018 at 11:50 PM, Marina Schwarz said:

Agree. I'm wondering how close to the edge is Trump gong to push them. It's interesting, though, isn't it? Close one major oil route and the global economy collapses. Not very good news for the renewables industry.

I honestly don't understand your statement, "Not very good news for the renewables industry."

I understand renewables can't replace the oil through the Strait of Hormuz, but the risk of loss of oil justifies renewables, big time, in my mind. People like Ted Cruz from Texas and John Borrasso from Wyoming have a lot to answer for. We are willing to send our Children to the Middle East to Risk their Lives and possibly Spill Their Blood for Oil, but these Clowns won't let us use E-15 in our fuel tanks in July, to reduce our need for that Blood Stained Oil. These people are NOT serving the Public's Good and need to be VOTED OUT OF OFFICE!

 

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The world's heavy reliance on oil, as evidenced by the implications of closing off Hormuz, clearly shows that renewables have a very long way to go to replace it. That's the not-very-good news for the renewables industry. In other words, renewables are not yet a viable alternative to oil.

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(edited)

Marina, on my next fill up, I would much rather have a little more American Ethanol and a little Less American Blood with my Gas.

Even if Renewables can't totally replace our oil, they can help save some American Blood. It's time to take a step back from the "No Ethanol" Pump, and realize American Ethanol can help us reduce our dependence on Middle East Oil.  

Edited by Tom Blazek
Added word

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No, not until the build the crude line thru Iraq and then on to the med.

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Keep in mind also that a terror  load on cargo premiums would go on most everything being shipped from the area which is insured by LLOYD'S of London . This would filter down to higher consumer & commodity prices as well.

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The Asian countries would be more affected by the closing the Strait of Hormuz than the US.

In 2017 only 17% of the US oil imports came from Persian Gulf countries, but 40% of China's oil imports came from this region.

A weapon causing more collateral damages to friendly countries than to your main opponent is not an efficient weapon.  Therefore I don't think it's a realistic option for Iran.

 

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Bigger picture here is that Rouhani’s political career is at stake. The agreement is the moderate cleric’s main achievement in office, for which he was rewarded with a second term last year, but US (and Saudi) antagonism towards Iran has empowered Rouhani’s hardline opponents at home, risking him becoming an early lame duck. Or maybe that is what they want

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On 7/4/2018 at 5:50 AM, Marina Schwarz said:

Agree. I'm wondering how close to the edge is Trump gong to push them. It's interesting, though, isn't it? Close one major oil route and the global economy collapses. Not very good news for the renewables industry.

On the other hand such an event shows the benefit of having a distributed diffuse supply of energy that doesn't all have to pass throught he same bottleneck. 

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