Saudi Arabia wants to send 10 million barrels of oil a day around Hormuz. A former Treasury official says it may barely move prices

Saudi oil giant Aramco, officially the Saudi Arabian Oil Company, is racing to build a bigger back door around the Strait of Hormuz.

Aramco CEO Amin Nasser said this week that the company is working to raise the capacity of its East-West Crude Oil Pipeline, also known as the Petroline, to 10 million barrels a day from about 7 million today, while running engineering studies on additional export routes. Nasser made the comments to Al Arabiya Business in his first interview since the war began. The plan echoes an announcement earlier this month from Saudi Energy Minister Prince Abdulaziz bin Salman, who told the WPC Energy Congress in Riyadh that the expansion would take two to three years.

The goal is to reduce the kingdom’s reliance on the Strait of Hormuz, which has been largely choked off since the U.S. and Israel launched a joint military attack on Iran on Feb. 28. Saudi crude production fell below 7 million barrels a day for much of the war’s first six months, down from more than 10 million before the conflict, and recovered to about 8 million in September, according to the International Energy Agency.

A bigger bypass, years away

The Petroline spans Saudi Arabia, running roughly 750 miles from the Abqaiq processing hub near the Persian Gulf to the port of Yanbu on the Red Sea. Before the war, it typically carried around 2 million barrels a day. Aramco ramped it up within weeks, and the line hit its full 7 million-barrel capacity by late March, with about 2 million of those barrels feeding Saudi refineries rather than export markets. The pipeline helped Aramco post a 25% jump in first-quarter profit. Adding another 3 million barrels a day would be a major undertaking.

But it may have little tangible impact on world fuel prices, according to Gilbert Metcalf, a visiting professor at the MIT Sloan School of Management and a former deputy assistant secretary for environment and energy at the U.S. Treasury Department.

“If—and this is a big if—the Saudis can increase pipeline flow to 10 million barrels per day, it will put about 2% more oil into the global marketplace,” Metcalf tells Fortune. “That could lower prices a bit, but there’s a lot of uncertainty here. The pipeline is vulnerable to drone and missile attacks, as is much of the Saudi petroleum infrastructure. And it’s not entirely clear that there is available refinery capacity to process the oil.”

A pipeline under fire

That vulnerability isn’t hypothetical. The Petroline was first hit in May 2019, when Houthi drones struck a pumping station. This year it has been attacked repeatedly. An April 9 strike on a pumping station cut throughput by about 700,000 barrels a day before Saudi Arabia restored full capacity days later. On Sept. 10, drones struck the line in the Riyadh and Medina regions; Saudi officials said they were launched from Iraq. The attack forced a precautionary shutdown that lasted until Sept. 22, according to Kpler. And a Saudi energy-sector source told AFP that an Oct. 4 attack on a pumping station in Khurais halted flows again, though Bloomberg reported that oil continued to move.

The Red Sea end of the route is under pressure, too. Yemen’s Iran-backed Houthis declared a maritime blockade of Saudi Arabia in July, have repeatedly attacked Saudi tankers, and in September seized control of the area around the Bab al-Mandab Strait, the southern gateway to the Red Sea. Southbound tankers leaving Yanbu must pass through it.

Hormuz still matters

Even if the pipeline runs smoothly, a bigger Petroline might do little to ease the world’s dependence on Hormuz. “I don’t think moving more oil to the pipeline takes much pressure off opening the Strait of Hormuz,” Metcalf says. “Despite what the U.S. Treasury and Energy Departments are saying, it does not appear that oil is flowing through Hormuz at anywhere near levels observed before the U.S. and Israeli attacks on Iran. Add to that threats in the Bab al-Mandab Strait and it’s clear that risks for Saudi oil production are as high now as they’ve ever been.”

Tanker data supports his skepticism. Energy Secretary Chris Wright said this month that Gulf crude flows had recovered to between 80% and 90% of prewar levels. But Kpler figures show oil exports through Hormuz averaged just under 9 million barrels a day in September, roughly 44% of February’s level. Gulf producers are pursuing longer-term workarounds as well: the UAE is fast-tracking a new pipeline of its own.

A shift in regional power

The Saudi government owns about 81.5% of Aramco. The kingdom’s sovereign wealth fund, the Public Investment Fund, holds 16%, and roughly 2.5% trades publicly. It is the world’s largest oil company and a major natural gas producer, with plans to raise gas output 80% by 2030 from 2021 levels. Yet even Aramco’s scale and an expanded pipeline may not be enough to shift the balance of power in the Middle East.

“The irony is that the balance of regional power has tilted from Saudi Arabia towards Iran as a result of the attacks on Iran,” Metcalf says. “This would have been unthinkable just a year ago.”

This story was originally featured on Fortune.com