More unintended consequences of Trump and Bibi's war. This time, a positive for the world.
How new petrostates are cashing in on the post-Hormuz era
Smaller nations with huge reserves are offering safe routes to plug the gap left by the Iran war, upending relationships that power the world
Drill, bai, drill!” As they say in Guyanese Creole.
Think of oil-producing countries and most of us will not name this South American nation with a population of just 840,000. However, Guyana produces almost a million barrels of oil per day (bpd) and is among a host of countries the world is turning to for a reliable supply of energy, bypassing the Strait of Hormuz.
The map of oil flow is changing. Guyana is among countries in the Americas, Africa and elsewhere trying to fill the gaps caused by the war in the Gulf. Aware that we may be in a time of constant tension with Iran, the Gulf states are accelerating plans to bypass the Strait with pipelines. If successful, the narrow gap at Hormuz will no longer be Tehran’s “geographic nuclear bomb”. Instead, it will have been the catalyst for ensuring routes are safer and diversified.
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Even combined, the figures above are dwarfed by the giants of fossil fuels in the Middle East. Saudi Arabia has reserves of 267 billion, the UAE 113 billion, Iran 209 billion, and Iraq 145 billion. However, the oil producers in the Americas and Africa have something they do not – open, safe access to the Atlantic and Pacific oceans. Tankers leaving Vancouver, Argentina’s Puerto Rosales or Tanzania’s Port of Tanga are not likely to be hit by missiles or drones, nor confined to dock for months.
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The main Asian customers for Africa’s oil are China, India and Japan. All three moved quickly this year as the race to find alternatives to the Gulf gathered pace. Many European nations are big buyers; indeed, the EU imports roughly 20 per cent of its oil from Africa, more than double the amount sourced from the Gulf.
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The crisis is not over, but the search for alternatives to supplies from the Gulf is well under way.