Gulf Oil Producers Seek Shared Costs for Hormuz Workarounds

Top executives from major Gulf oil producers have urged importers to share the costs of developing alternative routes to bypass the Strait of Hormuz and expand storage capacity closer to consumers. Saudi Aramco's CEO Amin Nasser emphasized the collective necessity of investing in oil and gas infrastructure, stating that no country should bear the burden alone. He warned that attacks on energy infrastructure have global repercussions, including weakened energy security and market disruptions.

Kuwait is exploring partnerships with European countries to store refined petroleum products nearer to consumers. Kuwait Petroleum Corporation's CEO Sheikh Nawaf Saud Al-Sabah highlighted the need for logistical investments to support storage solutions. Since the war began in February and Iran restricted access to the Strait of Hormuz, Gulf producers have been forced to find alternative shipping methods, including using smaller tankers to transport crude oil outside the strait before transferring it to larger carriers.

Saudi Arabia temporarily rerouted crude oil flows through the East-West pipeline to the Red Sea, but recent drone attacks disrupted operations for two weeks. Kuwait and Iraq are also considering new storage and transportation solutions to avoid the Strait of Hormuz, including reviving an old pipeline to Syria for Iraq to ship crude oil to the Mediterranean coast.