Iran is building a $1.8 billion oil pipeline to its port of Jask outside the mouth of the Gulf, the country’s oil minister said, as part of plans to protect its exports against potential problems in the region and to boost shipments of Caspian oil.
Iran has been planning since at least 2012 to set up the terminal on the Gulf of Oman, just outside the Strait of Hormuz.
Tehran has threatened to block the vital Gulf oil shipping route during its standoff with the United States, after Washington last year withdrew from Iran’s 2015 nuclear deal with world powers and re-imposed sanctions, including on Tehran’s vital oil exports.
“The project would transform the region as various oil storage facilities, export jetties, wave breakers and single buoy mooring systems would be built in Jask,” Oil Minister Bijan Zangeneh said through social media.
Zangeneh added that two refineries as well as petrochemical facilities were also planned in the region.
Industry sources told Reuters that Iranian crude exports had dropped in June to 300,000 bpd or less after Washington tightened sanctions on the country’s oil exports in May. In April 2018 exports stood at more than 2.5 MMbpd.