June 26, 2020
Iranian President Hassan Rouhani said Thursday, June 25, the 1,000-kilometer (621-mile) Goureh-Jask oil pipeline would enable the Islamic Republic to export its oil without relying on the Strait of Hormuz.
Describing the project as “strategic”, the mid-ranking cleric said 404 kilometers of the pipeline has been laid so far.
“What is strategic about this project is that many countries in the region have managed to find a second way to export their oil using other routes whenever the Strait of Hormuz faces danger,” Rouhani said while inaugurating the project.
“This move will assure our oil buyers that Iran will continue exporting crude even if the international maritime passage was to be closed one day,” Rouhani announced.
The comments were expressed at a time that, under U.S. sanctions, Iran’s oil exports have dropped from two million to around 200,000 barrels per day.
In recent years, Iran has repeatedly threatened to close the Strait of Hormuz, where about twenty percent of the world’s oil shipments pass through.
In the light of the strategic value of the straits, it is not clear if Iran’s move to build a pipeline is a defensive or an offensive move. If Iran one day can pump its oil to the sea of Oman, it can afford to disrupt traffic through the Strait of Hormuz.
Following Iran’s threats and the possibility of a regional war, some of Iran’s southern neighbors, including Saudi Arabia and the United Arab Emirates, completed pipeline projects to export their crude through routes other than the Strait of Hormuz.
In the meantime, Iran, for its part, exports all its oil products solely through the Strait of Hormuz.
Referring to Iran’s southern neighbors, and their projects to skirt the Strait of Hormuz, Rouhani noted that the only country “left in the middle” was the Islamic Republic.
“If the Strait of Hormuz closed for any reason, Iran would be the only country in the region that its oil exports would be completely stopped,” Rouhani said.
Rouhani went further by describing the project as unique, “This pipeline through which we will be transporting our oil to Jask and the Sea of Oman is a great, huge and unique work in the history of Iran.”
The project’s start was announced six years ago and less than half the pipeline network has been complete according to Rouhani. However, experts told Radio Farda that sending oil through the pipeline needs large investments for powerful pumping stations; a task Iran cannot easily complete facing severe technology and banking sanctions.
Despite repeatedly threatening to close the Strait of Hormuz, Rouhani last year insisted that Tehran would guarantee to keep it open.
In the meantime, he dismissed calls for closing the waterway as a dangerous “slogan”, asserting that blocking the Strait of Hormuz could backfire and create enormous problems for Iran.
The new terminal is close to the port of Chabahar on the Sea of Oman, which Iran is developing in cooperation with other countries, most notably India.
Iranian Oil Minister, Bijan Namdar Zanganeh, said Thursday night that the pipeline alone would cost $ 1.1 billion, of which $300 million has been invested so far.