Saudi Aramco considers expansion of 'East-West oil pipeline' bypassing Hormuz

(Cairo = Yonhap News) Correspondent Kim Sang-hoon = While the world is experiencing an unprecedented energy supply shock in history due to the war in the Middle East, Saudi Arabia's state-run oil company Aramco is considering expanding the 'East-West Oil Pipeline', an oil export route that bypasses the Strait of Hormuz.

Amin Nasser, CEO of Aramco, pointed out in a conference call announcing earnings on the 3rd (local time) that global energy flows and infrastructure investment priorities in the Gulf region are being reorganized as the Strait of Hormuz, through which 20% of the world's crude oil supply passes, is effectively blocked in the aftermath of the war.

He continued, “The impact of this incident is reaching far beyond the energy market,” and “Rising transportation costs, fertilizer shortages, and ripple effects on food and consumer goods are adding to inflationary pressures across the global economy.”

He said the company is exploring additional export routes and securing overseas storage capacity, including the possibility of expanding the east-west pipeline that transports Saudi crude oil to export hubs on the Red Sea coast.

CEO Nasser added, “Preliminary design for the expansion of the east-west oil pipeline is in progress.”

This oil pipeline, which has been attacked several times since the outbreak of the U.S.-Iran war, has the capacity to transport up to 7 million barrels of crude oil per day.

Previously, CEO Nasser described the East-West oil pipeline as a 'key lifeline' and announced plans to expand the pipeline's transportation capacity to 10 million barrels per day.

He reported the latest situation, saying, “So far, more than 130 attacks on oil tankers, mainly targeting very large crude carriers (VLCCs), have been reported, and as a result, sea freight rates have soared more than 15 times compared to a year ago.”

CEO Nasser also emphasized, "The fundamentals of oil demand remain solid, and the world cannot afford to be swayed by short-term market conditions to plan for its energy future. We are fully prepared to quickly increase production whenever the situation demands."