Following months of blockades and renewed conflict in Iran that pushed Brent crude to 100 dollars a barrel, Gulf oil-producing nations are rapidly advancing at least seven major pipeline projects and alternative export routes to bypass the volatile Strait of Hormuz, according to government disclosures and industry analysts.
The Chokepoint Crisis and the Limits of Existing Escape Valves
Before the war, roughly 15 million barrels of oil—nearly 2.4 billion liters—passed through the Strait of Hormuz every day, representing about a fifth of the world’s traded oil moving through a single maritime chokepoint as around a fifth of the world’s traded oil moved through the maritime chokepoint in peacetime, according to industry data. With the channel largely closed by blockades and uncertainty, global supplies have tightened sharply. When the Iran war reignited, Brent crude hit $100 a barrel for the first time since May, sitting well above the roughly $72 it fetched after a short-lived June truce, while the U.S. benchmark West Texas Intermediate rose above $90 a barrel.
Depending so heavily on the Strait of Hormuz is no longer a prudent long-term strategy,
said Victoria Grabenwöger, a senior researcher at the data firm Kpler. Yet the region’s existing escape valves are already operating near their absolute limits.
Saudi Arabia and the UAE: Diverting Volumes Through the Desert and the Gulf of Oman
Saudi Arabia has demonstrated that substantial crude volumes can be redirected away from the Persian Gulf. By utilizing its East-West Pipeline—built in the 1980s out of fear that Tehran might disrupt shipping during the Iran-Iraq War—the kingdom transports crude across the desert from its eastern fields and the Abqaiq complex to Yanbu on the Red Sea enabling it to keep up shipments to global markets by circumventing Hormuz entirely.
Data from the International Monetary Fund’s Portwatch platform shows that during April and May, Saudi cargo shipments from its Gulf coast fell from 47.5 million tons a year earlier to just 6.3 million tons. Over the exact same period, exports through the Red Sea rose from 29.6 million to 54.8 million tons, replacing roughly 61 percent of the volume lost on the Persian Gulf side according to data from the International Monetary Fund’s Portwatch platform.
In the United Arab Emirates, state-owned oil companies in Abu Dhabi are pushing forward with the construction of a 300-kilometer-long pipeline to Fujairah running parallel to an existing line. The project, which began before the war, is designed to increase the flow of oil to the port city by more than 1.2 million barrels per day. According to estimates by Kpler, the official early-2027 completion target is expected to slip to mid-2027 because the port itself must be expanded because the port itself must be expanded.
Red Sea Vulnerabilities and Houthi Attacks on Infrastructure
Bypassing the Strait of Hormuz does not eliminate geopolitical risk. The Red Sea route forces tankers past Bab el-Mandeb, a maritime chokepoint carrying about 12 percent of world trade where Houthi attacks have repeatedly threatened commercial shipping.
Yemen’s Iran-backed Houthi rebels declared a maritime blockade on Saudi-linked shipping in retaliation for the kingdom’s blockade of Yemen and an attack on Sanaa’s airport. The group claimed responsibility for attacks on two Saudi tankers, the Encelia and the Layla, setting both on fire setting both on fire. Saudi state media reported a blaze at the bow of the Encelia with no casualties, while the UK Maritime Trade Operations centre reported a tanker struck by an unknown projectile
southwest of Al Shuqaiq southwest of Al Shuqaiq.
Similarly, while Emirati ports sit outside the Strait of Hormuz on the Gulf of Oman, they remain vulnerable to regional strikes. During the fighting, the port of Fujairah came under attack, and vessels operating near the eastern coast were struck while vessels operating near the UAE’s eastern coast were also struck.
Iraq’s $60 Billion U.S. Agreements and Mediterranean Pipeline Plans
Nowhere is the scramble for alternative routes more urgent than in Iraq, which derives about 90 percent of its revenue from oil sales and has been forced to cut production due to its dependence on the Strait of Hormuz drawing about 90% of state revenues from oil exports and has had to cut output because of its dependence on the Strait of Hormuz.
Prime Minister Ali al-Zaidi returned from Washington after securing 48 agreements with American firms spanning energy, healthcare, and technology worth more than $60 billion according to Reuters, including tie-ups involving ExxonMobil, Shell, Halliburton, KBR and GE Vernova. The centerpiece involves a deal with Syria to rebuild the dormant pipeline running from the Kirkuk fields to the Mediterranean port of Baniyas. Iraqi state media reports that Chevron will execute the project, which the U.S. State Department welcomed as a critical energy corridor
with an initial capacity of 2 million barrels a day with an initial capacity of 2 million barrels a day.
Baghdad is also pursuing talks with Jordan to advance long-discussed plans for a pipeline from Basra to Aqaba, alongside broader concepts connecting Iraq with Oman, Kuwait, and the UAE in addition, talks are underway with Jordan to move forward with long-discussed plans for a pipeline from Basra to Aqaba.
Long-Term Outlook and Goldman Sachs Transport Projections
According to estimates by the investment bank Goldman Sachs, new projects designed to bypass the Strait of Hormuz could enable the transport of an additional 3.8 million barrels of oil per day by the end of next year. By the end of 2028, that figure could rise to 7.3 million barrels per day, meaning around 60 percent of pre-war exports from the Gulf states—amounting to 23 million barrels per day—could be transported without passing through the Strait of Hormuz amounting to 23 million barrels per day, could then be transported without passing through the Strait of Hormuz.
However, economists caution that massive engineering efforts require significant time and capital. Economist Hassan Mansour estimates that a Basra-Aqaba pipeline would require five to seven years and cost between $8 billion and $10 billion (€6.9 billion to €8.7 billion), while a Basra-Oman connection could cost $10 billion to $15 billion Mansour estimates that a Basra-Aqaba pipeline could require five to seven years and cost around $8 billion to $10 billion.
“The bottom line is that these projects cannot solve the oil market’s immediate problem.”
Hassan Mansour, Economist
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