CHOKE POINTS:
Choke points are narrow channels along widely used global sea routes, some so narrow that restrictions are placed on the size of the vessel that can navigate through them.They are a critical part of global energy security due to the high volume of oil traded through their narrow straits.In 2011, total world oil production amounted to approximately 87 million barrels per day (bbl/d), and over one-half was moved by tankers on fixed maritime routes. By volume of oil transit, the Strait of Hormuz, leading out of the Persian Gulf, and the Strait of Malacca, linking the Indian and Pacific Oceans, are two of the world's most strategic choke points.The international energy market is dependent upon reliable transport. The blockage of a choke point, even temporarily, can lead to substantial increases in total energy costs. In addition, chokepoints leave oil tankers vulnerable to theft from pirates, terrorist attacks, and political unrest in the form of wars or hostilities as well as shipping accidents that can lead to disastrous oil spills. The seven straits highlighted in this brief serve as major trade routes for global oil transportation, and disruptions to shipments would affect oil prices and add thousands of miles of transit in an alternative direction, if even available.
STRAIT OF HORMUZ:
Located between Oman and Iran, the Strait of Hormuz connects the Persian Gulf with the Gulf of Oman and the Arabian Sea. The Strait of Hormuz is the world's most important oil choke point due to its daily oil flow of about 17 million bbl/d in 2011, up from between 15.7-15.9 million bbl/d in 2009-2010. Flows through the Strait in 2011 were roughly 35 percent of all seaborne traded oil, or almost 20 percent of oil traded worldwide. More than 85 percent of these crude oil exports went to Asian markets, with Japan, India, South Korea, and China representing the largest destinations. In addition, Qatar exports about 2 trillion cubic feet per year of liquefied natural gas (LNG) through the Strait of Hormuz, accounting for almost 20 percent of global LNG trade. Furthermore, Kuwait imports LNG volumes that travel northward through the Strait of Hormuz. These flows totaled about 100 billion cubic feet per year in 2010.At its narrowest point, the Strait is 21 miles wide, but the width of the shipping lane in either direction is only two miles, separated by a two-mile buffer zone. The Strait is deep and wide enough to handle the world's largest crude oil tankers, with about two-thirds of oil shipments carried by tankers in excess of 150,000 dead weight tons. Most potential options to bypass Hormuz are currently not operational. Only Iraq,
Saudi Arabia, and the
UnitedArab Emirates (U A E) presently have pipelines able to ship crude oil outside of the Gulf, and only the latter two countries currently have additional pipeline
capacity to circumvent Hormuz. At the start of 2012, the total available pipeline capacity from the two countries combined, which is not utilized, was approximately 1 million bbl/d.The amount could potentially increase to 4.3 million bbl/d by the end of this year, as both countries have recently completed steps to increase standby pipeline capacity to bypass the Strait.Iraq has one major crude oil pipeline, the
Kirkuk-Ceyhan (Iraq-Turkey) Pipeline that transports oil from the north of Iraq to the
Turkish Mediterranean port of Ceyhan. This pipeline pumped about 0.4 million bbl/d in 2011, far below its nameplate capacity of 1.6 million bbl/d and it has been the target of sabotage attacks. Moreover, this pipeline cannot send additional volumes to bypass the Strait of Hormuz unless it receives oil from southern Iraq via the Strategic Pipeline, which links northern and southern Iraq. Currently, portions of the Strategic Pipeline are closed, and renovations to the Strategic Pipeline could take several years to complete.
Saudi Arabia has the 745-mile-long Petroline, also
known as the East-West Pipeline, which runs from across Saudi Arabia from its
Abqaiq complex to the Red Sea. The Petroline system consists of two pipelines with a total nameplate capacity of about 4.8 million bbl/d. The 56-inch pipeline has a nameplate capacity of 3 million bbl/d and its current throughput is about 2 million bbl/d. The 48-inch pipeline had been operating in recent years as a natural gas pipeline, but Saudi Arabia recently converted it back to an oil pipeline. The switch could increase Saudi Arabia's spare oil pipelinecapacity to bypass the Strait of Hormuz from 1 million bbl/d to 2.8 million bbl/d, which is only attainable if the system is able to operate at its full nameplate capacity.The UAE constructed a 1.5 million bbl/d
Abu Dhabi Crude Oil Pipeline that runs from
Habshan, a collection point for Abu Dhabi's onshore oil fields, to the port of
Fujairah on the
Gulf of Oman, allowing crude oil shipments to circumvent Hormuz. The pipeline was recently opened and the first shipment of 500,000 barrels of oil was sent through the pipeline to the Fujairah oil terminal where it was loaded on a tanker and sent to the Pak-Arab Refinery in Pakistan. The pipeline will be able to export up to 1.5 million bb/d, or more than half of UAE's total net oil exports, once it reaches full operational capacity in the near future. However, the UAE does not currently have the ability to utilize this pipeline completely,until it ramps to full capacity. In late May, Fujairah ruler Sheikh Hamad bin Mohammed Al-Sharqi noted that this pipeline capacity could rise further to a maximum 1.8 million bbl/d.Saudi Arabia also has two additional pipelines that run parallel to the Petroline system and bypass the Strait of Hormuz, but neither of them have the ability to transport additional
volumes of oil should the Strait of Hormuz be closed.
STRAIT OF MALACCA:
The Strait of Malacca, located between Indonesia, Malaysia, and Singapore, links the Indian
Ocean to the South China Sea and Pacific Ocean. Malacca is the shortest sea route
between Persian Gulf suppliers and the Asian markets—notably China, Japan, South
Korea, and the Pacific Rim. Oil shipments through the Strait of Malacca supply China and
Indonesia, two of the world's fastest growing economies. It is the key choke point in Asia
with an estimated 15.2 million bbl/d flow in 2011, compared to 13.8 million bbl/d in 2007.
Crude oil makes up about 90 percent of flows, with the remainder being petroleum products.At its narrowest point in the Phillips Channel of the Singapore Strait, Malacca is only 1.7 miles wide creating a natural bottleneck, as well as potential for collisions, grounding, or oil spills. According to the International Maritime Bureau's Piracy Reporting Centre, piracy,including attempted theft and hijackings, is a constant threat to tankers in the Strait of Malacca, although the number of attacks has dropped due to the increased patrols by the littoral states' authorities since July 2005.Over60,000 vessels transit the Strait of Malacca per year. If the strait were blocked, nearly
half of the world's fleet would be required to reroute around the Indonesian archipelago through
Lombok Strait, located between the islands of Bali and Lombok, or the
Sunda Strait,located between Java and Sumatra.There have been several proposals to build bypass options and reduce tanker traffic through the Strait of Malacca, but most have not been followed through. China is on
schedule to complete the Myanmar-China Oil and Gas Pipeline in 2013, two parallel oil and gas pipelines that stretch from Myanmar's ports in the Bay of Bengal to the Yunnan province of China. The oil pipeline will be an alternative transport route for crude oil imports from the Middle East to potentially bypass the Strait of Malacca. The oil pipeline capacity is expected to reach about 440,000 bbl/d.
SUEZ CANAL:
The Suez Canal is located in Egypt, and connects the Red Sea and Gulf of Suez with the Mediterranean Sea, spanning 120 miles. In 2011, petroleum (both crude oil and refined products) and liquefied natural gas (LNG) accounted for 15 and 6 percent of Suez cargoes,measured by cargo tonnage, respectively.In 2011, 17,799 ships transited the Suez Canal from both directions, of which 20 percent were petroleum tankers and 6 percent were LNG tankers. Only 1,000 feet wide at its narrowest point, the Canal is unable to handle Ultra Large Crude Carriers (ULCC) and most fully laden Very Large Crude Carriers (VLCC) class crude oil tankers. The table above shows weight and capacity for the different tanker types. The Suezmax was the largest ship capable of navigating through the Canal until 2010 when the Suez Canal Authority extended the depth to 66 feet to allow over 60 percent of all tankers to use the Canal, including ships that are 220,000 of dead weight tons in size.
SUMED PIPELINE:
The 200-mile long SUMED Pipeline, or Suez-Mediterranean Pipeline, provides an alternative to the Suez Canal for those cargos too large to transit through the Canal (laden VLCCs and larger).The crude oil flows through two parallel pipelines that are 42-inches in diameter, with a total pipeline capacity of around 2.4 million bbl/d. Oil flows north through Egypt, and is carried from the
Ain Sukhna onshore terminal on the Red Sea coast to its end point at the
Sidi Kerir terminal on the Mediterranean. The SUMED is owned by Arab Petroleum Pipeline Co., a joint venture between the Egyptian General Petroleum Corporation (EGPC), Saudi Aramco, Abu Dhabi's National Oil Company (ADNOC), and Kuwaiti companies.
The SUMED Pipeline is the only alternative route to transport crude oil from the Red Sea to the Mediterranean if ships were unable to navigate through the Suez Canal. Closure of the Suez Canal and the SUMED Pipeline would divert oil tankers around the southern tip of Africa, the Cape of Good Hope, adding approximately 6,000 miles to transit, increasing both costs and shipping time. According to the International Energy Agency (IEA), shipping around Africa would add 15 days of transit to Europe and 8-10 days to the United States.
BAB el MANDEB:
The Bab el-Mandab is a chokepoint between the Horn of Africa and the Middle East, and a strategic link between the Mediterranean Sea and Indian Ocean. It is located between Yemen, Djibouti, and Eritrea, and connects the Red Sea with the Gulf of Aden and the Arabian Sea. Most exports from the Persian Gulf that transit the Suez Canal and SUMED Pipeline also pass through the Bab el-Mandab.
The Bab el-Mandab is 18 miles wide at its narrowest point, making tanker traffic difficult and limited to two 2-mile-wide channels for inbound and outbound shipments. Closure of the Strait could keep tankers from the Persian Gulf from reaching the Suez Canal or SUMED Pipeline, diverting them around the southern tip of Africa, adding to transit time and cost. In addition, closure of the Bab el-Mandab would mean that oil entering the Red Sea from Sudan and other countries could no longer take the most direct route to Asian markets. This oil would instead have to go north into the Mediterranean Sea through other potential choke points, such as the Suez Canal and SUMED Pipeline.Security became a concern of foreign firms doing business in the region, after a French tanker was attacked off the coast of Yemen by terrorists in October 2002. In recent years,this region has also seen rising piracy, and Somali pirates continue to attack vessels off the
northern Somali coast in the Gulf of Aden and southern Red Sea including the Bab el-Mandab.
TURKISH STRAITS:
The Bosporus and Dardanelles are the Turkish Straits and divide Asia from Europe. The Bosporus is a 17-mile long waterway that connects the Black Sea with the Sea of Marmara,and the Dardanelles is a 40-mile long waterway that links the Sea of Marmara with the Aegean and Mediterranean Seas.Traffic through the Straits increased again as crude production and exports from Azerbaijan and Kazakhstan rose in recent years.Only half a mile wide at its narrowest point, the Turkish Straits are one of the world's most difficult waterways to navigate due to its sinuous geography. With 50,000 vessels, including 5,500 oil tankers, passing through the straits annually it is also one of the world's busiest choke points.While there are no current alternate routes for westward shipments from the Black and Caspian Sea region, there are several pipeline projects in various phases of development underway
PANAMA CANAL:
The Panama Canal is an important route connecting the Pacific Ocean with the Caribbean Sea and Atlantic Ocean. The Canal is 50 miles long, and only 110 feet wide at its narrowest point called Culebra Cut on the Continental Divide. Over 14,000 vessels transit the Canal annually, of which more than 60 percent (by tonnage) represent United States coast-tocoast trade, along with United States trade to and from the world that passed through the Panama Canal. Closure of the Panama Canal would greatly increase transit times and costs adding over 8,000 miles of travel. Vessels would have to reroute around the Straits of Magellan, Cape Horn and Drake Passage under the tip of South America.The relevance of the Panama Canal to the global oil trade has diminished, asmany modern tankers are too large to travel through the canal.
DANISH STRAITS:
The Danish Straits are becoming an increasingly important route for Russian oil exports to
Europe.About 3 million bbl/d flowed through this waterway in 2010, with most of this flowing
westwards. Russia has increasingly been shifting its crude oil exports to its Baltic ports,especially the relatively new port of Primorsk, which accounted for half of the exports through the Straits. An estimated 0.3 million bbl/d of crude oil, primarily from Norway, flowed eastward to Scandinavian markets.About one-third of the westward exports through the Straits are for refined products, coming from Baltic Sea ports such as Tallinn (Muuga), Venstpils, and St. Petersburg.
