The closure of the Strait of Hormuz has revealed the fragility of the oil export structure for Gulf Arab countries and Iraq, as these nations rely almost entirely on this vital corridor to export oil and gas to global markets. This situation has prompted the concerned countries to accelerate the search for alternative routes capable of accommodating part of the stranded exports.
In this context, energy market analyst Bashar Al-Halabi pointed out that the most prominent available alternative is the Saudi pipeline "East-West," which the Saudi Ministry of Energy has restored to its maximum capacity of 7 million barrels per day after it was only pumping 1 million barrels before the war. This pipeline extends for 1,200 kilometers from Ras Tanura in the east to the port of Yanbu on the Red Sea and was established in 1981 in response to the tanker war between Iran and Iraq in the 1980s.
Details of the Situation
This crisis serves as evidence that major energy crises often lead to alternative investments. Al-Halabi also noted that the United Arab Emirates has an oil pipeline linking Habshan to the port of Fujairah on the Arabian Sea, providing it with a margin of flexibility in exporting its production away from the Strait of Hormuz.
Currently, studies are underway among Gulf officials to develop additional export routes that reduce reliance on the strait. Concrete projects in this regard are expected to be announced after the war concludes.
Background & Context
Despite these efforts, Al-Halabi warned that achieving complete independence from the Strait of Hormuz remains an elusive goal in the near term. The U.S. Council on Foreign Relations concluded that reducing dependence on the strait takes years, if not decades, and requires substantial budgets and exceptional efforts.
However, Gulf countries possess the necessary human and financial capabilities to expedite this path, especially given the heavy losses their economies have incurred due to the closure of the strait.
Impact & Consequences
In a related context, journalist Mohamed Ramal noted on the interactive map that over 400 tankers are congested, waiting to exit the Arabian Gulf towards global markets, while more than 100 empty tankers are unable to enter. Ramal explained that the Iranian authorities' prevention of three empty tankers from entering reveals that the crisis affects both directions, meaning that even if the strait is partially opened, the empty tankers will still be unable to return to load supplies.
This situation exacerbates the challenges, as Iranian restrictions and rising insurance costs have become a significant obstacle in their own right.
Regional Significance
Under these circumstances, the United States benefits from the closure of the Strait of Hormuz, as Asian tankers are heading towards its shores to load American oil and gas. In contrast, Gulf countries cannot afford to endure this situation for long, as oil and gas revenues are a fundamental pillar in diversifying their economies towards a post-oil future.
Therefore, finding viable alternatives to the Strait of Hormuz is considered a strategic priority, not a deferred option.