(MENAFN) Oman is planning to build a storage facility to stock up to 200 million barrels of crude safely outside the Strait of Hormuz, Reuters reported.
The idea came up after Iran has repeatedly threatened to block the strait, through which a third of all sea-borne traded oil is shipped each day, as tensions with the West over Tehran's nuclear programme have intensified.
Threats to block Hormuz have already prompted the UAE to open a bypass pipeline across the desert to the Gulf of Oman port of Fujairah earlier this year, while Saudi Arabia has increased its capacity to export oil from its Red Sea Ports.
Nasser Al Jashmi, the chairman of the Oman Oil Company (OOC), said the government is implementing feasibility study on the project.
He added that the government could fund the project through OOC, and renting storage space at the proposed facility near Duqm to suppliers seeking protection against potential disruptions in the Gulf.
Oman currently produces about 900,000 bpd of oil, but does not export any of it through Hormuz, so the proposed storage would rely on other producers paying to use it.