Energy minister said on Thursday, Saudi Arabia wants to increase the capacity of its East-West pipeline by 40 percent within two years in order to prevent more oil exports from crossing the Strait of Hormuz.
Khalid al-Falih also told international news channel that importers should initially secure shipments via strategic waterway at the mouth of the Gulf, following attacks on oil tankers in the region and the seizure seizure of a British-flagged ship by Iran.
“Oil importers have to do what they have to do to protect their own energy shipments because Saudi Arabia cannot take that on its own,” Khalid al-Falih said in an interview during a visit to India.
The United States, which has imposed economic sanctions on Iran to stop its oil exports, is trying to rally support for a global coalition for Gulf water security. Britain has called for a European-led naval mission to protect ships.
“India also needs to do its part in securing free navigation of sea links transporting energy to the rest of the world,” Falih said after meeting Indian Oil Minister Dharmendra Pradhan.
Saudi Arabia aimed to maximise exports through the 5 million barrels per day (bpd) east-west pipeline if required, he said.
Saudi Arabia is already exporting some part of its oil through the Red Sea using a 1,200-kilometer oil pipeline that connects the east of the kingdom, where most of its oil production is located, to the Red Sea port city of Yanbu in the west.
“We are hoping to increase it to 7 (million bpd),” Falih said, although he said expanding capacity of the east-west pipeline, called Petroline, would take two years.
In his talks in India, Falih said Saudi Arabia was prepared to supply additional oil to India.
The minister said global oil demand was reasonably healthy but was lower than estimates had put it at the start of 2019.
The International Energy Agency is revising down its 2019 global oil demand growth forecast to 1.1 million bpd and may cut it again if the global economy slows further amid a U.S.-China trade spat.
“I am not concerned at all,” Falih said, adding that the U.S.-China trade row was not “impacting demand to a measurable degree” as Asia oil demand was healthy.
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