Another chance for the Odesa-Brody pipeline?

The Iranian parliament representative Karimi Kudusov informed, as reported by Interfax, that the Iranian parliament might block up to 35 percent of oil traffic in response to the sanctions imposed by the EU. The message reads that 150 members of the Iranian Majlis out of 290 have supported the bill on blocking the Strait of Hormuz. We remind our readers that up to 35 percent of the world oil is transported through this strait. “If the EU does not drop its sanctions, the countries that have imposed them will not be able to cross the Strait of Hormuz,” Kudusov specified. He also emphasized that the US navy will not prevent Iran from closing the strait. If the Iranian leader supports the bill, it will automatically signify closing the strait.

It should be recalled that the EU sanctions against Iran came into force on July 1, 2012. Those sanctions prohibit the European companies from importing the Iranian oil as well as insuring tankers transporting the Iranian oil to any other countries. Several countries outside the EU have joined the sanctions.

Is the “oil scenario” presented by Iran realistic? What are its reasons? If Iran redraws the world oil map, what consequences it might have for Ukraine? The Day asked the experts.

Mykhailo HONCHAR, director of the energy programs at Nomos Center:

“In case of the long-term blockade of the Strait of Hormuz by Iran the Central European oil refineries will have to focus on other sources of oil supply. I mean the supply from other countries. In this case the system of oil trade and its supply to Europe will significantly change. In this case the Ukrainian Odesa-Brody pipeline will get the second breath since it might transfer the Azerbaijani oil. However, it is a hypothetical situation. In my opinion, the EU and the US will not allow this scenario. If the strait is blocked, it will not last more than several months. Even now Saudi Arabia and the United Arad Emirates have partially switched the oil traffic from Persian Gulf to pipelines. That is why we should not expect any apocalyptic consequences for the global economy. Iran is playing a card of strait blockade because today the oil price on the global market is decreasing. It is disadvantageous for Iran since the sanctions have diminished the sales of the Iranian oil and it has to dump it in search for customers. One of those customers is China that, on the one hand, prevents powerful countries from dealing shortly with Iran and, on the other hand, makes it sell oil at low price.”

Viacheslav SHVED, leading scientist of the department for Asia and Africa at the Institute of the Global Economy and International Relations of Ukraine at the National Academy of Sciences of Ukraine, vice-president of the All-Ukrainian NGO The Ukrainian Center for Islamic Studies:

“Iran’s threats are propagandist and are aimed, first of all, at their people. According to certain sociologic surveys, nearly 80 percent of Iranians consider the foreign policy of their state adventurous and threatening the national security. Because of the EU’s sanctions some of the oil refineries have stopped, food price is rising as well as the unrest within the country. Such actions should make the EU drop its sanctions against Iran. The countries opposing Iran, the EU and the US pursue a coordinated policy aiming at diminishing the possibility of the negative developments. In particular, they are introducing new ground facilities that will allow those countries to import up to 40 percent of oil by land and not by sea. Besides, in case Iran carries out its threats, the US is intending to restore navigation in this strait. That is why, in my opinion, Iran’s threats are not realistic. The main tool to avoid oil lawlessness from any country in the future might be the reduction of oil price on the global market.”