Though the Islamic Republic of Iran has established a “sophisticated panoply” to protect itself against the possibility of regime change, its trump card, the Strait of Hormuz, is losing its strategic value and will continue to do so, Thomas O’Donnell, an American energy and geopolitics strategist and a Global Fellow of the Wilson Center, told The Jerusalem Post on Thursday.
With many of the regime’s regional proxies degraded over years of war with Israel and its nuclear ambitions delayed after the 12 Day War in June last year, Tehranonly has its rockets, drones, and ability to threaten the Strait of Hormuz left as an insurance policy against attempts to topple the regime, he noted.
These remaining elements will be used to dissuade action while it restores the others, but they are losing the weight they once carried, O’Donnell added.
Though 14 to 15 million barrels of oil traveled through Hormuz per day before the war, he argued that it was very possible to manage without much of that supply.
Saudi Arabia’s East-West Crude Oil Pipeline moves around five million barrels per day for non-domestic use, while the United Arab Emirates moves an average of 1.5 to 1.8m. bpd through its own pipeline, he calculated.
Some 400m. barrels of oil and refined petroleum products were unanimously approved for release by the 32 member nations of the International Energy Agency (IEA), while the US government committed 172 million barrels from its Strategic Petroleum Reserve.
None of this even touches on the oil supplied by the Western Hemisphere, where roughly 32% to 40% of the world’s total oil originates.
“There’s more production in other places, but [the disruption of] oil has not been anything like it would have been 20 years ago if they closed the strait,” he said, explaining how the US’s own oil and fracking industries have helped mitigate much of the damage.
“The oil price, it’ll go up and down. The fact that it went over $100 [a barrel], and the next day it was $80, that means that’s geostrategic variability. That’s not fundamental.”
A number of planned pipelines, namely the UAE’s plans to double its oil output through a parallel pipeline and Iraq’s plans for an Iraq-to-Syria pipeline, will also weaken the strategic value of Hormuz as states develop alternative routes.
Reflecting on these developments, US Treasury Secretary Scott Bessent shared earlier this month the prediction that the strait “is going to become just another body of water” over the next two years, estimating that 50-70% of the exports passing through the waterway would instead travel through underground pipelines.
Noting that the Iran-backed militias operating in Iraq could still cause some issues with the planned pipeline, he reasoned that this would provide further motivation for Iraq to keep to its September 30 deadline to disarm the groups.
O’Donnell further argued that beyond Hormuz becoming less valuable as a transit point for fuel, Iran’s own ability to defend its claim over the waterway has also diminished, as has its ability to attack neighboring states’ alternative oil routes.
No comments:
Post a Comment