The significance of securing oil trade routes has long been a concern to regional energy-exporting countries. The maritime security environment in and towards Asia is being challenged by increasing tensions. In East Asia, strategic competition and the long-term redistribution of power has been brought about by the rise of China. In the Middle East, oil exporters study the importance of diversifying energy trade routes to minimize dependence on key trade areas. However, dropping oil prices and tightening state budgets call for a more in-depth analysis of the costs and benefits of oil-trade security investments.
This discussion looked at the economic implications of maritime insecurity in the Middle East (Strait of Hormuz) and Southeast Asia (Strait of Malacca and South China Sea). It focused on the additional insurance costs in different insecurity scenarios, and the economic value of pipeline systems that reduce the exposure of Asia’s energy importers to maritime insecurity. This session discussed oil trade routes and the measures taken by energy importers and exporters to secure these routes.
Sheikh Mohammed bin Khalifa Al Khalifa is Chief Executive of nogaholding.
Dr Jarmo Kotilaine is Chief Economist at the Bahrain Economic Development Board.
Dr Pierre Noël is Sultan Hassanal Bolkiah Senior Fellow for Economic and Energy Security at the IISS.
Dr Omar Al-Ubaydli is Program Director for International and Geo-Political Studies at the Bahrain Center for Strategic, International and Energy Studies
The meeting took place on the 14th Floor, GBCORP Tower, Bahrain Financial Harbor, Bahrain.