Saudi Arabia has reopened an old oil pipeline built by Iraq on Thursday to bypass Gulf shipping lanes, giving Riyadh scope to export more of its crude from Red Sea terminals incase Iran try to block the Strait of Hormuz, industry sources told Reuters.
Iran threatened in January to block the Strait of Hormuz in retaliation for the U.S. and European sanctions that target its oil revenues in an attempt to stop the nuclear program.
Riyadh took the step as international pressure grows on Iran to curtail its nuclear program. A European Union embargo on buying Iranian oil takes full effect on Sunday, which will eventually affect Tehran's income.
"Negotiations with Iran over its nuclear program is a waste of time and it should be pushed forward towards time-limited talks," Saudi Arabia's Foreign Minister Prince Saud al-Fisal said on Monday, as Europe confirmed that a ban on oil imports from Iran will go ahead as planned on July 1.
"We really feel that Iran is trying to waste time and energy of everybody," said Prince Faisal.
The comments came during the joint ministerial meeting between the Gulf Cooperation Council (GCC) and the European Union (EU) in Luxemburg.
Meanwhile, Iran's chief nuclear negotiator Saeed Jalili warned world powers on Thursday against adopting "unconstructive measures" that harm talks, state television reported. "Those who replace logic in talks with illegitimate tools are responsible for harming the constructive trend of talks," Jalili wrote to EU foreign policy chief Catherine Ashton.
The effects of tensions have been diverse, with Saudi Arabia's decision to widen its export routes the latest evidence of states in the region preparing for difficulties.
The Iraqi Pipeline in Saudi Arabia (IPSA), laid across the kingdom in the 1980s after oil tankers were attacked in the Gulf by both sides during the Iran-Iraq war, has not carried Iraqi crude since Saddam Hussein invaded Kuwait in 1990.
Saudi Arabia confiscated the pipeline in 2001 as compensation for debts owed by Baghdad and has used it to transport gas to power plants in the west of the country in the last few years.
In the meantime, The United Arab Emirates is nearing completion of a pipeline through the mountainous sheikdom that will allow it to reroute the bulk of its oil exports around the Strait of Hormuz at the mouth of the Gulf, the path for a fifth of the world's oil supply.
With the Emirates' new pipeline, oil from fields deep in the Abu Dhabi desert would travel 236 miles (380 kilometers) overland and across the barren Hajar Mountains to this fast-growing port on edge of the Indian Ocean.