In the dynamic world of oil exports, Saudi Arabia is exploring new avenues to bolster its crude supply chain. A new pipeline project aimed at linking Saudi Arabia to Oman’s coast has gained attention, reflecting the kingdom’s strategy to diversify its export routes amid current geopolitical tensions.
Saudi Arabia’s New Pipeline Initiative
An industry executive recently revealed that Saudi Arabia is in the preliminary stages of developing a pipeline to Duqm, a significant location in Oman that hosts the largest oil refinery in the nation. Patrick Pouyanne, the CEO of TotalEnergies, made this announcement during the company’s investor day presentation in New York. While he confirmed that efforts are underway, he refrained from providing specific details regarding the project’s progress or timeline.
Analysts have been closely monitoring potential pipeline routes in the Gulf region, especially since the escalation of the US-Iran conflict. Rahul Choudhary, vice president of upstream research at Rystad Energy, indicated that the Duqm pipeline is currently under a feasibility study, which suggests that Saudi Arabia is assessing the viability and necessary investments for this project. The proposed pipeline is expected to span approximately 1,000 kilometers, with development costs projected to reach up to $7 billion.
Navigating Geopolitical Risks
The ongoing conflict has significantly affected shipping operations in the Strait of Hormuz, a critical chokepoint for global energy supplies. Given these conditions, Saudi Arabia has relied on its existing East-West pipeline to transport oil to the Red Sea, circumventing Hormuz. However, this route has its own set of challenges, including threats of blockades and recent drone attacks that temporarily halted oil flows.
While the East-West pipeline has since resumed operations, reports indicate that Saudi Arabia is actively seeking to establish more secure and diverse export routes. Amin Nasser, CEO of Aramco, recently highlighted the necessity of developing alternative paths for crude oil shipments. Connecting to Oman could potentially open access to the Indian Ocean, enhancing Saudi Arabia’s ability to serve its Asian customers while mitigating risks related to Iranian aggression.
Choudhary noted that Ras Markaz could be a strategic endpoint for the new pipeline, given its proximity to Iran — approximately 650-700 kilometers away. This location helps reduce the risk of potential attacks, making it a more viable alternative for oil exports. Nasser has underscored the commitment to conducting feasibility and engineering studies to explore these alternative export routes, with the pipeline to Duqm likely being a priority.
Broader Implications for the Region
The pursuit of new pipeline routes has become imperative for Gulf states amid ongoing conflicts. The United Arab Emirates, for instance, has developed a pipeline to Fujairah, which boasts a maximum capacity of 1.8 million barrels per day and effectively bypasses the Strait of Hormuz. This proactive measure has helped the UAE maintain consistent oil exports while expanding pipeline infrastructure for future increases in capacity.
TotalEnergies has also expressed willingness to invest in regional projects, reaffirming its commitment during the investor presentation. As the geopolitical landscape continues to evolve, the oil supply dynamics in the Gulf region will remain critical for energy security, both locally and globally.
In conclusion, Saudi Arabia’s developments suggest a strategic pivot toward ensuring uninterrupted oil exports through new pipeline routes. As the feasibility studies progress and regional developments unfold, stakeholders will watch closely to understand how these initiatives will shape the future of oil exports in the region.