New Delhi: Gulf oil producers are accelerating the construction of new pipelines and ports to reduce their reliance on the Strait of Hormuz. The push comes after a fresh wave of attacks on commercial shipping and renewed fighting between the US and Iran.
The Strait of Hormuz has long been the main export route for oil from Saudi Arabia, the UAE, Iraq, Kuwait and Qatar, carrying about a fifth of the world’s oil. Countries in the region are now investing billions of dollars in pipelines and new ports specifically designed to move oil without passing through the strait at all.
The UAE’s West-East Pipeline is now about halfway complete and expected to be finished by 2027. Once operational, it will double the country’s land export capacity to 3.6 million barrels per day.
Iraq has begun work on the 435-mile Basra-Haditha Pipeline, expected to carry 2.5 million barrels a day once it’s linked to Jordan, Syria and Türkiye. Saudi Arabia is reportedly studying an expansion of its Red Sea pipeline to 9 million barrels per day. The UAE is also planning a separate new port on the Arabian Sea.
According to Goldman Sachs analyst, enough pipeline capacity could be ready by the end of 2027 to insulate more than 45% of pre-war Gulf oil exports from any future disruption at Hormuz, with that share rising above 60% by the end of 2028.
Even with this expansion, experts say the strait will remain important, with 7 to 9 million barrels a day still expected to pass through it. Some of the alternative routes also depend on stability near the Bab el-Mandeb Strait, where Houthi attacks have separately threatened shipping.