The decades-long reliance on the Strait of Hormuz as the world's most critical oil gateway is being challenged by a wave of multi-billion-dollar pipeline projects across the Gulf, as governments seek to insulate exports from repeated disruptions along the Iranian coastline. According to the Times of India, at least seven major pipeline projects are either under construction, being planned or under discussion, with the potential to divert a sizeable share of the approximately 15 million barrels per day that previously passed through the strait.
The infrastructure push
The urgency has escalated as the chokehold on the strait continues and oil prices remain elevated. "Relying so heavily on the Strait of Hormuz is no longer a prudent long-term strategy," said Victoria Grabenwoger, a senior researcher at data and analysis firm Kpler, as reported by the Times of India. While alternative routes are not immune to disruption, Gulf producers increasingly see them as essential to protecting exports, even if it means longer shipping routes and higher transport costs.
Saudi Arabia and UAE: existing routes strained
Saudi Arabia already operates a key alternative: its East-West pipeline, built during the Iran-Iraq war in the 1980s, transports crude from the processing facility at Abqaiq to Yanbu on the Red Sea coast. The UAE has also increased shipments through Fujairah, its key export terminal on the Gulf of Oman, about 145 km south of the Strait of Hormuz. Before the war, these two pipeline systems together had spare capacity of between 3.5 million and 5.5 million barrels a day, according to the US Energy Information Agency (EIA). That spare capacity has now largely been absorbed, with both routes operating close to full capacity.
Abu Dhabi's state-owned oil company is speeding up work on a $3 billion, 300-km pipeline that will run alongside an existing line to Fujairah. The project is expected to increase supplies reaching the port by more than 1.2 million barrels per day. Although construction began before the war, Kpler estimates the pipeline is about halfway complete. It is officially targeted for completion in early 2027, though Kpler expects mid-2027 to be more realistic because Fujairah's port infrastructure also needs to be expanded. "The ambitious timeline has only become feasible against the backdrop of the Strait of Hormuz blockade," Grabenwoger said.
Iraq's plans
Iraq, whose southern oil exports depend heavily on Hormuz, is also stepping up efforts to diversify after the disruption forced it to scale back production. The government, which derives around 90% of its revenue from oil sales, is working with US companies on pipeline proposals that would transport crude from Basra to the Turkish Mediterranean port of Ceyhan. The proposed system would also include a branch to Syria's Mediterranean port of Baniyas, allowing up to 2 million barrels of oil a day to reach the terminal, which the US State Department has described as "a critical energy infrastructure."
| Project | Country | Capacity addition | Status | Expected completion |
|---|---|---|---|---|
| UAE Fujairah pipeline | UAE | 1.2 million bpd | Under construction (50% complete per Kpler) | Early 2027 (official), mid-2027 (Kpler) |
| Saudi East-West pipeline | Saudi Arabia | Existing (spare capacity used) | Operational, near full capacity | N/A |
| Iraq Basra-Ceyhan pipeline | Iraq | Up to 2 million bpd | Under discussion with US firms | Not announced |
Risks remain
Even these alternatives face threats. Iran-backed Houthi rebels in Yemen have this week declared a blockade on Saudi-linked vessels attempting to transit the Red Sea, highlighting that bypassing Hormuz does not guarantee safe passage. Gulf producers acknowledge the risks but believe diversification is necessary despite the prospect of longer shipping routes and higher transport costs.
Implications for global shipping
For freight forwarders and logistics operators, the shift means that key oil flows may gradually relocate from the Strait of Hormuz to Red Sea and Mediterranean ports. This could alter tanker routing, port congestion patterns, and infrastructure investment priorities. Ports like Fujairah, Yanbu, and Ceyhan are likely to see increased throughput, while the need for expanded terminal capacity at Fujairah may create construction-related delays. Additionally, the Houthi blockade in the Red Sea introduces a new chokepoint risk that operators must monitor closely. As these pipeline projects move forward, the global energy trade map is being redrawn, with direct consequences for shipping lanes and logistics networks.
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