Gulf states bypass Strait of Hormuz

Following the effective shutdown of the Strait of Hormuz due to the US-Iran war, Gulf oil producers are accelerating plans to build pipelines that bypass the strait. At least seven major pipeline projects are under construction or being planned, including Saudi Arabia's East-West pipeline running at full capacity, a $3 billion UAE pipeline to Fujairah expected by mid-2027, and Iraqi pipelines to Turkey and Syria. These projects could carry an additional 3.8 million barrels per day by end of 2027 and 7.3 million by end of 2028, potentially insulating 60% of prewar Gulf exports from a Hormuz cutoff. However, alternative routes remain vulnerable to attacks by Houthi rebels, as demonstrated by their attack on two Saudi oil tankers in the Red Sea. The new pipelines also add costs and longer shipping routes, and do not address LNG disruptions.