Global Disruption Spurs Pipeline Build-Out, Bakken Exports in Focus
Hormuz mine threat pressures global supply as US refiners and pipeline operators advance Gulf Coast projects, creating new outlets for inland crude.
The ongoing closure of the Strait of Hormuz continues to anchor global oil market volatility, with a senior U.S. official stating the critical chokepoint could be reopened without clearing all Iranian-laid mines. U.S. Energy Secretary Chris Wright said Tuesday that creating a safe shipping pathway "can happen quickly," according to a Rigzone report. However, a full clearance could take six months, a U.S. Defense official told Congress last week.
The strait's closure since late February has spiked prices and caused massive supply disruptions, underpinning refining margins. This environment helped Phillips 66 report stronger-than-expected Q1 earnings, beating estimates by $0.88 per share with net income of $207 million, OilPrice.com reported. The company cited higher refining margins amid the oil price rally.
For Bakken producers, expanding pipeline and export infrastructure offers a crucial outlet amid global instability. Phillips 66 is advancing several key projects to optimize Gulf Coast NGL and refined product capacity. The company recently completed debottlenecking, increasing Sweeny NGL fractionation capacity by 23% and Freeport LPG export dock capacity by 15%.
Major pipeline expansions are also in the works. The Coastal Bend NGL pipeline expansion is expected to boost capacity from 225,000 barrels per day to 350,000 bpd by Q4 2026, connecting Permian and Eagle Ford production to Gulf Coast fractionation. Furthermore, Phillips 66 and Kinder Morgan are developing the Western Gateway Pipeline project, aiming to move up to 200,000 bpd of refined products to Arizona and California by mid-2029.
In a recent move highlighting domestic crude mobility, Phillips 66 became the first company to use a temporary Jones Act waiver to ship Bakken crude from Beaumont, Texas, to the Trainer refinery in Pennsylvania, OilPrice.com reported.
Secretary Wright also indicated the U.S. plans to announce "historic" pipeline agreements to increase the flow of U.S. oil and gas to Europe, part of the Trump "Peace Pipeline Agenda," according to Rigzone.
The prolonged Hormuz disruption carries significant macroeconomic risk. The National Institute of Economic and Social Research warned the UK economy faces a hit to growth of at least 0.5 percentage points this year due to the Iran war, with a risk of recession, OilPrice.com reported. The think tank warned a scenario with oil at $140 per barrel would cripple growth and force significant interest rate hikes.
Source
According to reports from OilPrice.com and Rigzone.
