There are three major threats to the world’s oil supply.
Blocking the Strait of Hormuz is the greatest threat and would cut the world’s oil supply by nearly 25%.
The second most serious threat is destruction of the oil processing facility at Abqaiq in Saudi Arabia. This facility processes two thirds of Saudi Arabia’s oil, and would cut the world’s oil supply by 10% if the facility were seriously damaged.
The third most serious threat would be severe damage to the Saudi shipping terminal at Ras Tanura in the Eastern Province. Severe damage to this facility could cut the world’s oil supply by around 5%.
Other threats, such as blocking the Strait of Malacca, which would result in longer shipping times and increased oil inventories at sea, or disrupting Nigerian or Venezuelan oil production, could be offset by increased production from Saudi Arabia.
The Strait of Hormuz is around twenty-five miles wide at its narrowest point. The shipping lanes are two miles wide with a two-mile separation. The eastern or northern lane is for inbound traffic while the southern or western lane is for outbound traffic. Water depths are actually deep enough outside these lanes for safe passage by most ships, but the lanes maintain an orderly flow of shipping and minimize the danger of collisions or groundings. The shipping lanes are just outside Iran’s territorial waters. Super tankers, or VLCCs, have drafts of 60 or more feet, while the depths at the Strait are well over 300 feet.
Because of the depth of the water, merely sinking a ship in the Strait would not block the flow of oil. The recent terrorist attack on a Japanese tanker could not have disrupted the flow of oil, though it could have resulted in higher insurance rates.
It would require war-like actions by Iran to effectively block the Strait of Hormuz.
There was a terrorist attack on the Abqaiq facility in Saudi Arabia in 2006. It failed, but nearly succeeded. Presumably the terrorists have learned from that failure so the next attempt could be successful.
The primary purpose of the facility is to remove hydrogen sulfide from the crude and to reduce vapor pressure. Hydrogen sulfide is a poisonous gas that must be removed before oil can be shipped.
There are two oil shipping terminals in the Eastern Province — one is Ras Tanura, the second is the newer terminal at Ras Ju’aymah. The Ras Tanura terminal is larger and would represent the greater threat to the oil supply if it were severely damaged.
A large plane crashing into Ras Tanura could shut it down and prevent the pumping of oil to the tankers that berth at loading docks in the Arabian Gulf.
All of Saudi Arabia’s oil is located in the Eastern Province. Most of the people living in the Eastern Province are Shi’a, while Saudi rulers are Sunni who largely adhere to the conservative Wahabi sect.
Historically, Wahabi clerics have treated the Shi’a very badly so there is resentment among the Shi’a that could encourage recruitment by Al’Qaida.
Our reliance on volatile Mid-East oil is a threat to our economy, which is a valid reason for actions that reduce our dependence on foreign oil.
These actions include; increased drilling in the United States and its outer continental shelf; development of the Plug-in electric vehicle to determine whether it can become viable; continued research and development of hydrogen fuel-cell vehicles; and continued exploration of whether natural gas vehicles can replace gasoline powered vehicles.
Future articles will discuss why biofuels are not a viable alternative.
Blocking the Strait of Hormuz, destroying the facility at Abqaiq or severely damaging Ras Tanura are serious threats.