Every day ships carrying 16.5 million barrels of oil – almost 20 percent of the world’s total oil consumption – pass through the Strait of Hormuz, the narrow waterway that links the Persian Gulf to the Gulf of Oman. In the past few weeks an uncomfortable reality has been forced on the world’s attention: the rogue state of Iran has a stranglehold on this vital shipping lane, and thus on a significant proportion of the global economy.
Always aware of its potential power, Iran has from time to time chosen to demonstrate its muscle, but these isolated incidents were infrequent, In October 2015 a group of nine countries led by the US signed a deal with Iran aimed at preventing it from developing nuclear weapons. The European Union, a firm supporter of the deal, argues that the current crisis can be traced back to May 8, 2018, when President Donald Trump withdrew the US from it and re-imposed sanctions on Iran.
Yet from the moment its terms were announced, Trump had made no secret of his distaste for the deal. Throughout his presidential election campaign in 2016 he said that he regarded it as fatally flawed, and he repeated this on taking office. A major criticism was that the deal was time-limited, and Iran would be free in some 15 years to resume its nuclear weapons program. He also believed that Iran’s continuing program of developing and testing ever-more sophisticated guided missiles broke the spirit of the deal.
Tit-for-tat threats followed, and then action – Iran’s President Hassan Rouhani began openly to exceed the threshold set in the deal for enriching uranium, while the US increased its troops and military hardware in the Persian Gulf area on three separate occasions.
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Then on May 12, 2019, four commercial oil tankers anchored in UAE waters in the Strait of Hormuz were attacked and damaged. Exactly a month later two tankers were rocked with explosion and fire near the Hormuz Strait, and crews were forced to abandon ship. Finally on July 19 two British-flagged oil tankers were seized by Iran’s Revolutionary Guards in the Strait of Hormuz. One was allowed to proceed; the other was hi-jacked and taken to the Iranian port of Bandar Abbas.
The Strait of Hormuz flows between Iran and the Musandam peninsula, a spit of land that pokes up towards the Iranian coast but does not quite reach it. At its narrowest the waterway is only 21 nautical miles wide. The chunk of land at the tip of Musandam belongs to Oman, although it is not contiguous with Oman proper. The region beneath this Omani exclave is the UAE.
Iran’s dominance of the Strait of Hormuz has never satisfied its arch-enemy, Saudi Arabia. Back in September 2015 the Arab Century Centre for Studies published a study that proposed constructing a 950-kilometer canal connecting the Persian Gulf with the Arabian Sea. Initial highly optimistic estimates for the mega project were around $80 billion.
Saaed Bin Omar, the head of the centre, believed that the canal – its proposed name was the Salman Canal in honor of the king – could be constructed within five years. “We hope the project will be completed during his rule,” he said, but little has been heard of it in the past few years.
Blueprints for a less ambitious scheme to by-pass the Strait of Hormuz have existed for more than a decade. Back in 2008 the UAE considered a project devised by British engineers to construct a 360-kilometer canal across the Musandam peninsula, south of the Omani exclave. At the time it was estimated to cost some $200 billion, given that the canal would have to cut across the Hajar mountain range, to emerge at the oil port of Fujairah, on the east coast of the UAE. The plan envisaged recovering the cost of construction over time from charging vessels for use of the canal. After consideration the project was mothballed in favor of a 360 kilometer Habshan–Fujairah oil pipeline, which was started in 2008 and commissioned in 2012.
An examination of the map indicates that an even simpler, and far less costly, canal scheme could be effective in protecting some particularly vulnerable shipping from Iranian interference. The tip of the Musandam peninsula is Omani territory. A 60-kilometer canal linking the Persian Gulf with the Gulf of Oman could be constructed across this Omani exclave, and would achieve the political objective of providing an alternative route for any vessel that would prefer to by-pass the Gulf of Hormuz. It would have the additional benefit of easing the pressure of traffic on the overcrowded Hormuz route.
The shorter canals would do little to cut journey times, and thus costs but, by reducing Iran’s ability to disrupt western interests, could provide the civilized world with a political advantage.
The longer proposed “Salman Canal” would indeed offer a much faster route for the world’s shipping between the Persian Gulf and the Indian Ocean, and could make a positive contribution towards reducing oil prices worldwide. Given Iran’s much more aggressive stance in the Strait of Hormuz recently, perhaps the time has come for some lateral thinking. If Saudi Arabia took those plans out of storage and dusted them down, it might be surprised at the support it receives from the rest of the world.