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Oil producers in the Persian Gulf could withstand a closure of the Strait of Hormuz for up to 25 days. The assessment was made by investment bank JPMorgan Chase & Co, Bloomberg reported.
The estimate takes into account storage capacity in seven countries in the region, including Iran. Total capacity amounts to 343 million barrels. These storage facilities could be filled within 22 days. The Gulf also has another 60 empty tankers with a combined capacity of 50 million barrels. As a result, produced oil could be accumulated in storage for up to 25 days. After that period, if the Strait of Hormuz does not become safe for shipping, countries would have to reduce or halt oil production.
Of the seven countries, only Saudi Arabia and the United Arab Emirates have pipelines that bypass the Strait of Hormuz and provide access to alternative routes. Their capacity would be limited in order to achieve total exports of 19 million barrels per day.
It should be noted that Iran today attacked the largest refinery of Saudi Aramco in Ras Tanura. The plant’s operations were suspended, although the strike did not affect oil shipments.
Against the backdrop of the war, oil futures prices rose. The price of the nearest Brent crude futures contract reached $80 per barrel twice today.