Before the war in Iran, around 15 million barrels of Persian Gulf oil were shipped daily through the Strait of Hormuz. However, many countries in the Gulf region are now planning significant infrastructure investments to bypass this critical chokepoint. Rising oil prices and ongoing tensions with Iran have prompted Gulf states to explore alternative export routes.
Pipeline Projects in Progress
Governments and oil companies have initiated or considered at least seven major pipeline projects. These efforts aim to redirect oil supplies to the Red Sea, Gulf of Oman, and Mediterranean ports. The objective is to reduce reliance on the Strait of Hormuz, which lies close to the Iranian coast.
Challenges with Alternative Routes
While these alternative paths offer strategic advantages, they are not without risks. For example, Houthi rebels, backed by Iran, claimed responsibility for recent attacks on two Saudi oil tankers in the Red Sea. Such incidents highlight the vulnerabilities of even the most carefully planned routes.
Some routes require longer and more costly journeys to reach their markets. Still, industry experts agree that dependence on the Strait of Hormuz is not a sustainable long-term strategy.
Existing Pipeline Infrastructure
Saudi Arabia’s East-West pipeline, established in the 1980s, has proven invaluable. It transports oil from Abqaiq to Yanbu on the Red Sea coast. From Yanbu, oil can continue south to the Arabian Sea or move north through the Suez Canal.
The United Arab Emirates sends increasing volumes of oil to Fujairah port, adjacent to the Gulf of Oman. Before the war, Saudi and UAE pipelines had a combined spare capacity of 3.5 to 5.5 million barrels daily, data from the U.S. Energy Information Administration reveal. Today, these pipelines operate near full capacity.
Ambitious Expansion Plans
Abu Dhabi is fast-tracking a $3 billion pipeline to Fujairah. This project, covering 300 kilometers, seeks to boost oil output at Fujairah by over 1.2 million barrels per day. The construction is about halfway complete, with completion expected by mid-2027 due to port expansion needs.
Iraq is also prioritizing alternatives for its southern oil fields around Basra. Plans involve developing a pipeline linking Basra with the port of Ceyhan in Turkey. Another branch may extend to Baniyas in Syria, potentially transporting 2 million barrels daily. Discussions continue with Jordan to complete a long-considered pipeline to Aqaba, facilitating exports through the Red Sea or Suez Canal.
Potential Capacity Increases
Analysts from Goldman Sachs estimate new projects could redirect approximately 3.8 million barrels daily by the end of next year and increase to 7.3 million barrels by 2028. These projects could allow about 60% of the region’s pre-war oil exports to avoid the Strait of Hormuz.
However, shifting oil exports away from the Persian Gulf complicates supply logistics, especially for Asian markets traditionally served by Hormuz shipments. Routes passing the southern tip of Africa or through the Suez Canal present challenges, such as large tanker restrictions.
Navigating these complexities, Gulf countries continue to invest in pipelines to safeguard their export capabilities and enhance economic resilience.
Story updated to reflect the correct name: U.S. Energy Information Administration.
Contribution from Associated Press writer Qassim Abdul-Zahra in Baghdad.