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Energy Security: Potential for EU-GCC Cooperation than discussing the potential for closure of the strait subsequent to military action on the part of Iran, this study assumes that this is possible and investigates the potential economic impact of such a closure. Its key conclusions are: “A closure of the Strait of Hormuz has the potential to reduce the flow of oil by far more than any previous disruption, both in absolute and percentage terms. Of the 85 million barrels the world consumes each day, 20 percent passes through the Strait of Hormuz. By comparison, the Arab oil embargo of 1973, at its peak, resulted in a gross Figure 7: strait of Hormuz supply loss of 5 mbd, representing 9 percent of world oil consumption (which has increased by 28 mbd since the embargo). The cumulative oil supply loss from a Strait closure could reach the total amount of oil lost during previous oil shocks in 17 to 37 days. Nevertheless, the OECD countries have enough oil in primary inventory to last them more than eight months, should Persian Gulf oil cease to flow.” 6 4 In this context, it is important to underline the potential role of pipelines to allow export of Gulf oil from terminals that are outside of the Gulf and do not require transit through Hormuz. Of the five major Gulf oil exporters, three (Iran, Saudi Arabia and the UAE) have ports outside of the Gulf: Iran and the UAE on the Indian Ocean, outside of Hormuz; and Saudi Arabia on the Red Sea. Indeed, Saudi Arabia has a pipeline (known as the Petroline) with a capacity of 5 mb/d running from the Eastern province, where the oil is produced, to the Red Sea port of Yanbu, and it has been exporting crude oil and products from there since more than 20 years. 7 Iraq does not have a maritime outlet outside of the Gulf, and indeed even its outlet on the Gulf is insufficient and cannot accommodate very large crude carriers. For this reason, it has developed over the years several alternatives, • notably: A pipeline running from the fields in Northern Iraq across Turkey to the Mediterranean port of Ceyhan • A pipeline running from the fields in Northern Iraq across Syria to the Mediterranean port of Banias • A pipeline from the fields in Southern Iraq across Saudi Arabia to the Red Sea port of Yanbu’ (known as IPSA) The operations of all of the above have been disrupted by political and/or military interference at various times. Currently, only the pipeline to Ceyhan through Turkey is in operation, albeit at a low level (900,000 b/d currently versus an original design capacity of 1.6 million b/d). In the end, Kuwait is the only major Gulf oil exporter which at present has absolutely no alternative but to ship oil through the Strait of Hormuz. In conclusion, a threat to freedom of navigation through the Strait of Hormuz is a scenario that cannot entirely be discarded, but should be nuanced. There is universal consensus on the conclusion that, as
long as a credible commitment on the part of the US to keep the strait open exists, its closure can only be temporary. In all likelihood, it would also be partial. In any case, mitigation measures are of the utmost importance – to react to a possible emergency and even more to prevent an emergency by reducing the expected benefit of closing the strait. Mitigation measures may be of a general kind, such as strategic stocks, or specific: among the latter we should in particular mention oil pipelines to loading terminals outside of the Gulf, whose use and expansion should be encouraged. other Choke Points: the Malacca strait Essentially all traffic between the Far East and points west of Singapore passes through Malacca – according to the International Maritime Organization, at least 50,000 ships sail through this strait every year – many, many more than just tankers. 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. Sovereignty over the waters of the Malacca Strait is divided between Singapore, Malaysia and Indonesia. It is doubtful that any of these three states might wilfully attempt to close the strait or attack vessels transiting through them, but the possibility of attacks on the part of non-state actors – as well as of accidents with environmental consequences that would require at least temporary closure of the strait to navigation – must be considered. The Malacca Strait is frequently associated with endemic acts of piracy: we shall speak of non-state actors as a potential source of threat. When a distinction is made between different types of vessels and between local and longdistance traffic, it is shown that crude oil tankers (and LNG tankers) are among the least vulnerable categories of ships transiting the strait. Bateman et al8 recognize that “A successful terrorist attack on a crude oil tanker could cause massive economic and environmental damage” but believe that this is unlikely. Experience in the “tanker war” (during the Iran-Iraq war) demonstrated that tankers are more resilient targets than normally recognized. Threats to Oil Supply Security Furthermore, “These vessels are also less vulnerable to piracy or sea robberies when underway due to their size and speed. It is virtually impossible, and certainly highly dangerous, for a small craft to attempt to get alongside such a large vessel travelling at its normal operational speed.” We should note, however, that the successful hijacking of the Saudi tanker Sirius Star off the coast of Kenya in November 2008 appears to contradict this conclusion. An analysis conducted by the Institute of Defence and Strategic Studies (IDSS) in Singapore, 9 confirmed that the vast majority of attacks are on the smaller, more vulnerable vessels carrying trade across the Straits or employed in the coastal trade on either side of the Straits rather than oil or LNG tankers. It is to be noted that the Lombok Strait between the islands of Bali and Lombok in Indonesia to access the South China Sea is a valid alternative for larger vessels. the Bab-el-Mandeb Bab el Mandeb is a strait located between Yemen on the Arabian Peninsula and Djibouti, north of Somalia in the Horn of Africa, and connecting the Red Sea to the Gulf of Aden. It is of importance to all tanker traffic from the Gulf to the Mediterranean, which normally includes tankers directed to North West Europe and the United States. Alternatively, this traffic can also circumnavigate Africa and very large crude carriers, which cannot pass through Suez, routinely follow this alternative route. The domestic security situation in Yemen justifies some concern. Not only has the country become a haven and redeployment base for elements linked to the al-Qaeda, but the danger of state failure and decline comparable to neighboring Somalia is real. This may well create conditions whereby nonstate actors may engage in violent action against oil targets in the strait. That said, piracy has become endemic not just in the strait but in the entire offshore area of Yemen and Somalia, reaching out to offshore Oman on one side and offshore Kenya on the other. Therefore, the issue is not specifically Bab el Mandeb, but more generally security of navigation at sea in the Gulf of 4
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Page 3: Contents Introduction 5 I. The Euro
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Page 93 and 94: SESSION V: Renewable Sources in EU-
Page 95 and 96: • technologies, overall technical
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onshore (378 TWh/yr), large-scale h
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world. Hence, renewable energy supp
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case. Figure 8 shows the developmen
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Overview of RES Characteristics and
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keep the RES surcharges for the ene
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in the electricity sector, particul
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References • • • • • •
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Energy Security: Potential for EU-G
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Gulf Research Center Foundation
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