Gulf Nations Plan Billions in Pipelines to Bypass Strait of Hormuz

Persian Gulf oil producers are planning to invest billions of dollars in new pipeline infrastructure to bypass the Strait of Hormuz, a critical shipping route increasingly threatened by regional conflict. Historically, approximately 15 million barrels of oil were transported daily through the strait. However, escalating tensions and the potential for disruption have prompted countries in the Gulf to seek alternative export routes, primarily along the Red Sea and the Gulf of Oman. At least seven significant pipeline projects are either under construction, in the planning phase, or under discussion, according to government officials, oil companies, and analysts. This strategic shift aims to reduce dependence on a transit point situated along Iran's coast. The war in the region has served as a "wake-up call" for these producers, highlighting the vulnerabilities of relying heavily on the Strait of Hormuz. Victoria Grabenwöger, a senior research analyst at data firm Kpler, stated that relying on the strait is "no longer a prudent long-term strategy." The Red Sea and the Gulf of Oman are emerging as vital alternative pathways for oil exports. Even alternative routes face their own risks, as evidenced by recent reports of Houthi rebels attacking Saudi oil tankers in the Red Sea, a key alternative route for Saudi oil. Some of these alternative paths will also result in longer and more costly journeys to market. Saudi Arabia already possesses the East-West pipeline, constructed in the 1980s during the Iran-Iraq war, which transports oil from Abqaiq to Yanbu on the Red Sea coast. The United Arab Emirates has also increased its oil shipments to the port of Fujairah, located on the Gulf of Oman.