Iran bypasses Hormuz

Iranian president Hassan Rouhani has announced that Iran is planning to spend $2.5bn on a new oil export terminal in the town of Jask on the Gulf of Oman.

"By implementing the plan, exports of oil won't rely on just one port and one place, Kharg Island, in the Persian Gulf and through the Strait of Hormuz, but it will also be available through the Sea of Oman," he said in a public address this week.

Rouhani added that turning Jask into an oil hub would be a difficult job that would need three to four years to complete.

Iranian Oil Terminals Company (IOTC) Pirouz Mousavi told Iranian media this week that the oil terminal would include storage tanks, loading and unloading wharves, three single-point moorings (SPM) as well as other onshore and offshore facilities.

Pipelines will connect the new Jask terminal to the Neka oil terminal near the Caspian Sea and also to oilfields situated in southern Iran.

The project is expected to cost $2.5bn and will be open to both Iranian and foreign private investors.

While Mousavi stressed that the terminal would shorten the distance and delivery time for Iranian oil exports, the site of the terminal outside of the Arabian Gulf has obviously been chosen also for its strategic location.

The biggest fear of many of the oil-exporting nations in the Arabian Gulf is the closure of the narrow Strait of Hormuz in a time of conflict. That would effectively shut down their oil exports unless they had access to pipelines to carry the oil to loading ports in the Gulf of Oman or Red Sea.