TotalEnergies Backs Two Major Oil Pipelines to Bypass Hormuz

Crude oil prices, tracked by the United States Oil Fund (AMEX:USO), slipped 1.8% to 132.21 dollars on August 24, even as TotalEnergies backs two major pipeline projects meant to route Gulf crude around the Strait of Hormuz. The fund still sits well inside its 52 week range of 102.42 to 142.33 dollars, with an RSI of 57.41 suggesting the market is neither overbought nor stretched.

Why TotalEnergies Backs Two Pipeline Routes Around Hormuz

TotalEnergies chief executive Patrick Pouyanné told the ONS energy conference in Norway on Monday that the French supermajor will put money into two separate projects designed to keep crude flowing even if the Strait of Hormuz gets choked off again. One is an expansion of the United Arab Emirates' Habshan to Fujairah pipeline, which already moves up to 1.8 million barrels a day from Abu Dhabi's fields to the Gulf of Oman, skipping Hormuz entirely. Abu Dhabi wants to roughly double that capacity by next year. The other is a proposed pipeline running from Baghdad through Syria to the Mediterranean, a route that would give Iraq an alternative to its heavily used southern Gulf terminals.

Pouyanné did not say how much capital TotalEnergies would commit or what ownership stake it expects to hold in either venture. He did say the company sees itself as one of the largest traders of oil out of Iraq and Qatar, which he framed as reason enough to put equity behind a backup route.

The Price Tag and Timeline for the Iraq to Syria Line

Recent estimates put the cost of the Iraq to Syria pipeline near 15 billion dollars, with construction likely to stretch past four years. That is a long runway for a project meant to solve a problem that already cost the market dearly this year.

How the Iran War Exposed a Chokepoint

Before the conflict between Israel and Iran disrupted tanker traffic this year, roughly one fifth of global oil supply passed through the Strait of Hormuz. Six months of snarled shipping through that narrow passage pushed pipeline planning into what amounts to emergency mode across the Gulf. Pouyanné had already flagged alternative export routes as an

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