In pipelines we trust

The addition of an oil pipeline to the Power of Siberia 2 gas project could ensure deliveries of Russian oil to China, materially shorten logistics lines between West Siberia and final customers, and—amid disruption in the Strait of Hormuz—offer a land-based export route that reduces exposure to maritime chokepoints

The US-Iran conflict and the closure of the Strait of Hormuz have laid bare the risks of maritime chokepoints for the entire world. What was once a theoretical possibility—that a fifth of the world’s supply of oil and LNG flowing through Hormuz could be closed off overnight—has been reclassified from a worst-case scenario to reality. This has occurred in a way that makes the risk of future closures appear substantially higher than before. It has become obvious that, in the coming months and years, major buyers and sellers of hydrocarbons will significantly reassess logistical risks in light of the crisis. In the process, they will likely assign much higher probabilities to chokepoint closure