Brent crude has jumped about eight per cent since mid-June as worsening relations between the US and Iran have magnified fears that shipments could be disrupted through the Strait of Hormuz.
Tuesday 25, June 2019
The Chief Executive Officer of Saudi Aramco said that the state-owned oil giant has the experience and infrastructure it needs to keep crude flowing should supply through the Strait of Hormuz be disrupted, reported Bloomberg.
Amin Nasser, the CEO of Saudi Aramco, said, “We are increasing our readiness, we can supply through the Red Sea and we have the necessary pipelines and terminals.”
There have been a series of attacks on tankers over the past few weeks and the downing of a US Navy drone, which American officials have blamed on Iran.
“It’s a concern for the whole world because that is an important supply route for a lot of crude, not only from Saudi Arabia,” Nasser said.
Saudi Aramco operates a pipeline with a capacity of five million barrels a day that carries crude 1,200 km between the Arabian Gulf and the Red Sea, enabling it to ship oil from both sides of the country. But that compares with the company’s total exports of around seven million barrels a day, meaning it would need to find other ways of getting any remaining oil to the market.
In mid-May, flows through the cross-country link were halted after two pumping stations were hit by a drone attack by Yemen’s Iranian-backed Houthi rebels.
Saudi Aramco, the world’s biggest oil exporter, traces its beginnings to the 1930s and kept pumping crude through the Iran-Iraq war and the two Gulf Wars and Aramco will draw on that experience to keep supplies flowing, Nasser said.
“We had experience through the Gulf conflict but we have always met our commitments to our customers,” so we have a track record of building enough flexibility in the system to manage a situation or a crisis,” Nasser said.