Before the latest round of conflict involving Iran, roughly 15 million barrels of Persian Gulf crude moved through the Strait of Hormuz every single day. That narrow waterway, just 21 miles wide at its tightest point and bordered by Iran and Oman, has long functioned as the world’s most critical oil chokepoint. Within a few years, a substantial portion of that volume could leave the strait behind entirely.
As Iran’s effective grip on Hormuz has dragged on and oil prices have climbed, countries across the Gulf are committing billions of dollars to new and expanded pipeline networks. These projects are designed to push more crude toward ports on the Red Sea, routes linked to the Suez Canal, and terminals on the Gulf of Oman. At least seven major pipeline initiatives are now under construction, in advanced planning stages, or under active discussion, according to government officials, oil companies, and industry analysts. The conflict has turned long-standing contingency plans into urgent infrastructure programs.
The strait’s vulnerability is not new. For decades, energy strategists have warned that any serious disruption there would send shockwaves through global markets. About one-fifth of the world’s oil trade typically passes through it, along with a significant share of liquefied natural gas. When that flow is interrupted or threatened, the consequences appear quickly in higher prices at the pump and rising costs for industries worldwide. Gulf producers have understood the risk for years, yet heavy reliance on the waterway persisted because alternatives were limited, expensive, or incomplete. The current crisis has changed the calculation.
Saudi Arabia already possesses the most important existing bypass. Its East-West pipeline, built in the 1980s during the Iran-Iraq war, carries crude across the desert from the Abqaiq processing complex to the Red Sea port of Yanbu. From Yanbu, tankers can sail south into the Arabian Sea or north toward the Suez Canal. The United Arab Emirates has similarly expanded use of the port of Fujairah on the Gulf of Oman, about 145 kilometers south of Hormuz. Before the latest fighting, the combined spare capacity of these two systems stood at roughly 3.5 million to 5.5 million barrels per day. Both are now running close to full.
That existing capacity is no longer considered sufficient. Abu Dhabi’s state oil company is accelerating a $3 billion, 300-kilometer pipeline that will run parallel to the current line feeding Fujairah. The project is expected to add more than 1.2 million barrels per day of export capacity. Construction began before the war but has been sped up sharply. Analysts at the data firm Kpler report that the line is roughly halfway complete. Officials aim for early 2027 completion, though Kpler suggests mid-2027 is more realistic once necessary expansions at the Fujairah port itself are finished. Victoria Grabenwöger, a senior researcher at Kpler, noted that the ambitious timeline “has only become feasible against the backdrop of the Strait of Hormuz blockade.”
Iraq faces an even more acute problem. The country depends on oil for approximately 90 percent of government revenue and has already been forced to scale back production because of export constraints. Most of its southern crude from the Basra region has historically moved through Hormuz. Iraqi officials are now advancing multiple alternative routes. One plan would transport oil from Basra toward Turkey’s Mediterranean port of Ceyhan, with a possible branch extending to the Syrian port of Baniyas. Another long-discussed project would send crude across Jordan to the Red Sea port of Aqaba. From Aqaba, oil could move via the Red Sea or connect to Suez Canal traffic bound for Asian and European markets. U.S. companies have been involved in some of the discussions, and American officials have described the Baniyas corridor as a critical energy route.
Taken together, these and related projects could create meaningful new capacity. Goldman Sachs analysts estimate that new bypass infrastructure might handle 3.8 million barrels per day by the end of next year and rise to 7.3 million barrels per day by the end of 2028. If those figures materialize, roughly 60 percent of the Gulf’s pre-war export volumes of about 23 million barrels a day would be insulated from a full Hormuz cutoff.
The new routes, however, come with clear trade-offs. Oil piped to the Mediterranean travels in the opposite direction from the needs of many Asian buyers who previously relied on Hormuz shipments. Reaching final customers in Asia would often require a longer and more expensive voyage around the southern tip of Africa. Additional volumes reaching the Red Sea remain exposed to threats from Iran-backed Houthi forces in Yemen, who have already demonstrated the ability to disrupt shipping near the Bab el-Mandeb Strait. The Suez Canal itself cannot accommodate the largest very large crude carriers, which hold up to two million barrels and remain the most cost-efficient vessels for long-haul transport. Even inland pipelines are not immune to attack. Saudi Arabia’s East-West line was temporarily shut by a Houthi drone strike in 2019, underscoring that distance from the strait does not guarantee safety.
An even more difficult challenge remains largely unaddressed. Roughly one-fifth of the world’s liquefied natural gas, much of it from Qatar, also moved through Hormuz before the conflict. Diverting LNG is more complex and expensive than moving crude. Pipelines, floating storage, and alternative liquefaction or regasification options would require different investments and longer lead times. So far, the public focus has remained heavily on oil.
The strategic shift carries broader implications. For decades, the global oil market treated the free flow of Persian Gulf crude through Hormuz as a given. That assumption is now being rewritten in steel and concrete. Gulf governments are no longer treating the strait as an unavoidable fact of geography. They are spending heavily to redraw the map of energy logistics. Longer routes will raise costs, and some markets will face greater volatility during the transition. Yet the producers appear determined to reduce their exposure to a single, highly contested waterway.
The current conflict has accelerated decisions that might otherwise have taken another decade. Existing pipelines are being pushed harder. New ones are moving from discussion to construction. Port capacity is being expanded. Overland corridors linking the Gulf to the Mediterranean and Red Sea are receiving fresh political and financial backing. None of these steps will eliminate risk entirely. They will, however, give Gulf exporters more options the next time tensions rise in the waters between Iran and Oman.
In the short term, oil markets will continue to react to every development around Hormuz. Prices have already reflected the uncertainty. In the longer term, the physical infrastructure now being built could permanently reduce the strait’s outsized role in global energy trade. Whether that outcome fully materializes depends on project execution, security conditions along the new routes, and the willingness of governments to keep funding multi-billion-dollar pipelines even after the immediate crisis eases. For now, the direction is clear. Middle East oil producers are moving, as quickly as politics and engineering allow, to ensure that a future disruption in the Strait of Hormuz does not shut in their most valuable export.
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