Editorial: Going Locomotive - All Aboard The Oil Train
"You and I come by road or rail, but economists travel on infrastructure." Margaret Thatcher (1925 - 2013)
News reaches us today that Oman, the Sultanate of 3.8 million people perched on the southeast coast of the Arabian Peninsula, is going ahead with funding for its stretch of the Gulf Cooperation Council (GCC) Railway project.
The 2,200km high-speed line will link all six member states of the GCC, starting in Kuwait and ending at the shores of the Indian Ocean in Oman at a slated cost of some $20 billion.
As well as providing a vital transit corridor for the inhabitants of the desert Kingdoms, Emirates and Sultanates of the Peninsula, there is a greater geopolitical angle to this transnational megaproject. When completed in 2018, the GCC Railway will provide an alternative route for hydrocarbon shipments in the region, enabling the bypassing of the Iranian-controlled Strait of Hormuz.
Currently, 35 per cent of all seaborne traded oil passes through this 34 kilometre-wide chokepoint at a rate of more than 17 million barrels per day. The Strait is the most important energy transit point on Earth, more than four times busier than the Suez Canal and SUMED Pipeline combined.
The shale oil and gas revolution in North America has shown us just how important The Steel Highway can be in the transport of the Black Gold in the 21st century, with 71 percent of all crude from North Dakota's Bakken field now leaving the region by train
With Iran, the world's fourth largest oil producer, now trying to reintegrate into the wider international community, the GCC nations' might see their magnetic grip on the world oil markets slightly diminished. And this particular infrastructure project may present the perfect way for the economists to rail against rivals...
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