Iran has refused to halt its nuclear programme despite the threat from major powers of increased U.N. sanctions. The United States said on Sunday that Tehran had left the U.N. Security Council no choice but to increase sanctions after Iran ignored an informal deadline to respond to an offer for talks on its nuclear programme.
The West accuses Iran of seeking to build atomic weapons, a charge Tehran denies.
The U.S. says it wants a diplomatic solution to the dispute but has not ruled out military action if that fails.
Iran, pumping around 4 million barrels per day (bpd) of oil, is the second largest producer in the Organization of the Petroleum Exporting Countries (OPEC). Iran's output is over 4 percent of global oil supply. It exports around 2.5 million bpd.
OPEC's Secretary General Abdullah al-Badri said in July it would be impossible to replace Iran's oil output in the case of disruption due to an attack.
GULF OIL EXPORTS
– The biggest concern to oil markets is that 40 percent of the world's traded oil sails on tankers through the narrow Strait of Hormuz off Iran's southern coast.
Iran has threatened to impose controls on shipping there if attacked and warned Gulf neighbours of reprisals if they play any role in such an attack. The U.S. Navy has said it would not allow Iran to block the route.
The International Energy Agency estimated in July 2008 that more than 15 million barrels per day of oil passed through the strait.
The following are estimated crude exports through the strait by country of origin:
COUNTRY Millions barrels crude per day*
Saudi Arabia 6.0
Iran 2.5
United Arab Emirates 2.3
Kuwait 1.7
Iraq 1.6
Qatar 0.7
Alternative export routes:
– The world's largest oil exporter Saudi Arabia sends at least 75 percent of its shipments from the Gulf offshore terminal at Ras Tanura, or around 6 million bpd of its oil exports of around 7.6 million bpd.
Saudi Arabia is the only Gulf exporter with a sizeable alternative export route. The 5 million bpd east-west crude pipeline can take oil from eastern fields to the Red Sea Yanbu terminal.
The line is used at less than half capacity so could handle about half the exports from Ras Tanura if necessary. Yanbu terminal has capacity to export around 4.5 million bpd of crude and presently ships less than 2 million bpd.
GAS EXPORTS FROM QATAR, UAE:
– Gas chilled to liquid form (LNG) is exported through the Strait from Qatar and the United Arab Emirates.
– Qatar is the world's top LNG exporter, shipping 31 million tonnes per year to markets in the U.S., Europe and Asia. By the end of the year it plans to boost export capacity to 38 million tonnes.
– The UAE exports around 5.5 million tonnes per year, mostly to Japan.
– Gulf countries export around 1.6 million barrels per day (bpd) of oil products, mostly to Asia. Any halt would have a big impact on a Asian refineries and oil product markets with repercussions globally on prices.
IRAN'S REFINERIES
Two of Iran's oil refineries are near nuclear facilities that may be targeted in any strike.
Isfahan: location of Iran's second largest refinery and also the site of its uranium ore processing plant and its largest nuclear technology and research centre. Isfahan's oil refinery has capacity to process 250,000 bpd of crude.
Arak: Oil refinery has capacity of 150,000 bpd. Western officials suspect Iran may secretly use spent nuclear fuel to make bomb-grade plutonium at a heavy-water reactor in Arak due for completion in 2009.
Iran's largest oil export terminal is at Kharg Island in the northern Gulf, well away from the Strait. The Island has a loading capacity of around 5 million barrels per day, around double current daily exports. Kharg has storage facilities for 16 million barrels of oil.
The second-largest facility is at Lavan Island, further south in the Gulf, with capacity to load 200,000 bpd and storage of 5 million barrels.
Iran produces oil from 40 fields, of which 13 are offshore in Gulf waters. Around 900,000 bpd of Iran's oil output capacity of 4.2 million bpd is offshore.
Iran is the world's fourth-largest gas producer but exports only a fraction of its 112 billion cubic metres of daily output. It pumps around 30 million cubic metres per day through a northern pipeline to Turkey. Iran imports up to 23 million cubic metres per day, also in the north, from Turkmenistan.
Sources: Crude exports using Reuters data, PFC Energy estimates and U.S. Energy Information Administration website.
