U.S.-Saudi MERA Oil consortium advances $5 billion Gulf refinery plan outside Hormuz
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U.S.-Saudi consortium MERA Oil has announced plans to build a $5 billion refinery with 200,000 barrels per day capacity outside the Strait of Hormuz, selecting from three GCC locations. The project, which also includes a deepwater port and storage, aims to bypass the strategic chokepoint amid heightened regional instability. The announcement comes as Saudi Aramco's Jazan refinery remains offline after a Houthi strike, removing 400,000 bpd from global refining capacity.
The Refinery Plan
MERA Oil includes Texas-based MWG Group, the Patel Family Office, and PWS, a company linked to Saudi AHQ Group, according to Reuters. The consortium is evaluating three potential sites within the Gulf Cooperation Council for the $5 billion facility, which will have a capacity of 200,000 barrels per day. The project comprises a deepwater port, storage capacity, and export infrastructure, with future plans to add sustainable aviation fuel processing and carbon management capabilities.
Market Strain
The refinery announcement follows a Houthi missile strike on Saudi Aramco’s Jazan refinery on July 25, which forced a shutdown and cut 400,000 barrels per day of refining capacity, as verified by Reuters video. The outage, expected to last until mid-August, tightened an already strained global fuel market where crack spreads have hit record highs due to disruptions in the Persian Gulf, Red Sea, and Russia. While Russia has begun restarting refineries damaged by Ukrainian drone strikes, its ban on diesel exports remains in place, further constraining supply.
What's Next
The consortium is expected to finalize a site selection in the coming weeks. It remains unclear whether the new refinery, years from completion, can alleviate near-term fuel shortages as geopolitical risks continue to threaten key energy infrastructure.
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U.S.-Saudi MERA Oil consortium advances $5 billion Gulf refinery plan outside Hormuz
