The 'Hormuz' Threat Since 1980 and Oil Experts Lulled Us with Honey
Written by Ahmed Al-Jarallah:
Fears of the closure of the Strait of Hormuz are not new. Since the announcement of the “Carter Doctrine” on January 23, 1980, and about four months later, Al-Siyasah published a report based on the question: Does closing the Strait of Hormuz mean World War III?
The general context of this analytical investigation was based on several premises, the most important of which was that Kuwait had no outlet to export its oil—the primary source of revenue—except through this waterway. The question was legitimate at the time, prompting action to find alternatives for this sole artery.
True, this occurred amidst the Iran-Iraq War, and the “Tanker War” was in its infancy (resembling what is happening today). Therefore, it was necessary to propose ideas that would serve the state’s strategic path, economically and financially. This is the responsibility of experts and senior officials in this sensitive sector, as well as the ministers of oil and finance, and others whose duty is to develop alternative plans and envision the future.
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Alternative plans for oil-producing countries have existed for years and are renewed periodically. We should look, for example, at Saudi Arabia, which planned in 1946 to create the “Tapline,” opened in 1950, as an alternative to the Strait of Hormuz (although this line ceased operations after the 1967 war, it represented a vision for the future).
Similarly, in recent decades, the Kingdom worked on creating the “East-West” pipeline reaching the Red Sea, while the UAE established the “Habshan-Fujairah” pipeline. Consequently, they were not significantly affected in recent months when the Strait of Hormuz was closed.
Based on these events, the risks have existed for a long time, and preparedness for them must be in the minds of the officials concerned with this matter, rather than simply continuing with “the deceased’s carefree attitude” as long as the situation is stable. The constant phrase on the lips of executive officials is: “They never worry; everything is fine and under control.”
These individuals possess many privileges that should qualify them to prepare for the future, learn from their peers in other oil-producing countries, review their plans, and even more importantly, utilize all capabilities to ensure continuity and excellence. This is especially pertinent given that Kuwait, over the past six months and based on published reports, has not exported a sufficient quantity of oil, which has adversely affected the overall situation.
In the recent crisis, Iran emerged as the sole controller of the global energy artery. Thus, countries began immediately implementing alternative plans, while Kuwait, which relies on oil for 90 percent of its revenue, fell into the trap of lacking alternatives.
Today, the entire world is seeking alternatives, whether through harnessing solar or nuclear energy, or other means, as well as building alternative oil pipelines. Meanwhile, Kuwait has faced this problem for more than five decades, with it persisting to this day. Had we had alternatives, at least strategic storage in other countries close to those importing Kuwaiti oil, it would have saved the state considerable resources.
Relying on a single source of income is a major obstacle to a country’s future, as it incurs significant losses during any crisis, as is the case with the Republic of Nauru, which relied entirely on its phosphate revenue. When phosphate prices collapsed in the early 1990s, it fell into a severe crisis from which it still suffers today.
If we had alternatives in place since the issue of the single water route was raised, the situation would have been vastly different. We would not have needed to borrow from the Generations Fund or other sources. Rather, experts—both Kuwaiti and foreign—who enjoy every financial privilege, including substantial compensation and high salaries, should have had all the alternative plans ready for this purpose.
Thus, returning to what was published on April 20, 1980, in Al-Siyasa newspaper, it is clear that the warning existed back then. However, it seems that “your uncle is deaf,” because those who read it at the time did not take the matter seriously, nor did they review the plans of other countries. Therefore, the question today is: Where is the experts’ vision for the future in this regard?
Finally, according to experts, Kuwait has an oil reserve exceeding 100 billion barrels, excluding gas. The world will need oil and gas for approximately the next hundred years. Does this not warrant seeking alternatives to eliminate the associated risks?
