Yemen is not a major oil producing country, but its coast borders the Bab el-Mandeb Strait, a narrow chokepoint between the Horn of Africa and the Middle East. This straight is a strategic route for Persian Gulf oil, natural gas and petroleum product shipments to Europe and North America, s well as European and North African oil exports to Asia. Although the strait is 18 miles wide at its narrowest point, tankers passing through must use two two mile wide shipping channels.
Trade in crude oil and petroleum products transiting the Bab el-Mandeb has increased steadily in recent years, growing from 2.7 million bpd in 2010 to 4.7 million bpd last year. From 2013 – 2014, trade grew by over 20%, with an increase of over 200 000 bpd in crude oil exports from Iraq to Europe contributing to higher northbound traffic.
Record level exports of crude oil and petroleum products from Russia to Asia contributed the most to higher southbound traffic through the strait, somewhat offset by declines in exports of petroleum products from Europe and Exports of crude oil from Libya. Approximately 30% of Bab el-Mandeb’s southbound traffic also passed through the Suez Canal or the Suez Mediterranean pipeline.
While the volume of oil traded has increased over the past five years through the Bab el-Mandeb, LNG shipments through the strait have declined. Middle East LNG exporters, especially Qatar, have been steadily exporting more LNG to Asia, while European imports of LNG have declined. Over 2 trillion ft3 of LNG passed through the strait in 2011, approximately 18% of world LNG trade. By 2014, the EIA estimates the volume fell to approximately 1.2 trillion ft3, or 10% of world LNG trade.
Increased stability around the Bab el-Mandeb could keep tankers in the Persian Gulf from reaching the Suez Canal or the Sumed Pipeline, diverting them around the southern tip of Africa, adding to transit time and cost. In addition, European and North African southbound oil flows could no longer take the most direct route to Asian markets through the Suez Canal and then on to the Bab el-Mandeb. As the security situation in Yemen has continued to deteriorate, the US has heightened maritime security in the area, and has announced its intention to work with Gulf Cooperation Council partners to ensure the continued flow of commerce through the strait.
Edited from press release by Claira Lloyd
Read the article online at: https://www.hydrocarbonengineering.com/refining/24042015/oil-trade-off-yemen/