ADNOC Pursues Oil-Products Pipeline to Bypass Strait of Hormuz
Summary
- Abu Dhabi National Oil Co. (ADNOC) is pursuing construction of an oil-products pipeline that would bypass the Strait of Hormuz.
- Markets see bypass infrastructure for the Strait of Hormuz as a way to reduce some supply disruption risk from the Middle East if it is built.
- In the short term, however, approvals for passage through the strait and whether military tensions ease will likely be more direct drivers of global oil prices and risk-asset sentiment.
Forecast Trend Report by Period
Abu Dhabi National Oil Co., or ADNOC, is pursuing construction of an oil-products pipeline that would bypass the Strait of Hormuz. The move would diversify export routes as rising tensions in the Middle East fuel concerns about disruptions to maritime transport.
Odaily, a cryptocurrency-focused media outlet, reported on June 2 that the Financial Times, citing sources, said the pipeline would be ADNOC's next key project.
The pipeline is being conceived along the lines of the U.S. Colonial Pipeline. It would be able to switch between and transport multiple types of petroleum products.
The Strait of Hormuz is a key route for seaborne shipments of global crude oil and liquefied natural gas, or LNG. Concerns about the stability of traffic through the waterway have grown as tensions involving Iran, the U.S. and Israel have escalated.
Markets view infrastructure that bypasses the Strait of Hormuz as a way to reduce some of the risk of supply disruptions from the Middle East if it is built. In the short term, however, approvals for passage through the strait and any easing in military tensions will likely be more direct drivers of global oil prices and sentiment toward risk assets.
Minseung Kang
minriver@bloomingbit.ioBlockchain journalist | Writer of Trade Now & Altcoin Now, must-read content for investors.
