Gulf oil producers race to build alternative routes to the Strait of Hormuz

By Quirino Mealha Published on 23/07/2026 - 11:27 GMT+2 Share Comments Add Euronews on Google Share Facebook Twitter Flipboard Send Reddit Linkedin Messenger Telegram VK Bluesky Threads Whatsapp Gulf oil producers are spending billions of dollars on pipelines designed to route crude around the Strait of Hormuz, as Iran's grip on the waterway drags on and the region's most important export artery remains precarious. Before the war, roughly 15 million barrels of Gulf oil passed through the Strait of Hormuz every day, as roughly a fifth of the world's traded oil moved through the maritime chokepoint in peacetime. ADVERTISEMENT ADVERTISEMENT With the channel still largely closed and prices elevated, at least seven major pipeline projects are now under construction, in planning or under discussion to push supplies out through the Red Sea, the Suez Canal and the Gulf of Oman instead, according to Gulf officials, energy companies and market analysts. With the Iran war reignited this month, Brent crude is trading again at around $93 a barrel at the time of writing, well above the roughly $72 it fetched after June's short-lived truce, and the US benchmark WTI has also risen to roughly $90 a barrel. Depending so heavily on the Strait of Hormuz "is no longer a prudent long-term strategy," said Victoria Grabenwöger, a senior researcher at the data firm Kpler. Two escape valves already exist, and both are close to their limits. Saudi Arabia's East-West pipeline, built in the 1980s when Tehran threatened shipping during the Iran-Iraq war, carries crude from the Abqaiq complex to Yanbu on the Red Sea, where tankers head south towards the Arabian Sea or north to the Suez Canal. Related Trump threatens to bomb Tehran back for every Iranian attack in HormuzHouthis claim strikes on Red Sea oil tankers as US continues attacks on Iran Meanwhile, the UAE has been channelling more oil to Fujairah, its port on the Gulf of Oman about 145 kilometres south of the Strait of Hormuz. Together the two links had a spare capacity of some 3.5 to 5.5 million barrels a day before the war, according to the US Energy Information Administration, and both now run close to full representing around 6.5 million barrels a day. Abu Dhabi's state oil company is also racing to finish a project it began before the war. Its $3 billion (€2.6bn), 300-kilometre pipeline to Fujairah, laid alongside an existing line, is designed to lift deliveries by over 1.2 million barrels a day and is roughly half built, according to Kpler, which expects the official early-2027 completion target to slip to mid-2027 because the port itself must be expanded. Even that timetable, the firm argues, only became conceivable because of the blockade. Red Sea relief, Red Sea risk The Red Sea route has vulnerabilities of its own, and this week served as a reminder. Yemen's Iran-backed Houthi rebels, who declared a blockade on Saudi-linked shipping in retaliation for the kingdom's blockade of Yemen and an attack on Sanaa's airport, said on Thursday they had attacked two Saudi tankers, the Encelia and the Layla, setting both on fire. Saudi state media reported a blaze at the bow of the Encelia with no casualties, while the UK Maritime Trade Operations centre reported a tanker struck by "an unknown projectile" southwest of Al Shuqaiq. The Iran-backed group has disrupted the Bab el-Mandeb Strait before, a maritime chokepoint carrying about 12% of world trade, and a Houthi drone strike forced the East-West pipeline itself to shut back in 2019. FILE. Seagulls fly in front of the Red Sea port city of Jiddah, Saudi Arabia, Oct. 2019 AP Photo/Amr Nabil Iraq's $60 billion bet on Washington Nowhere is the scramble more urgent than in Iraq, which draws about 90% of state revenues from oil exports and has had to cut output because of its dependence on the Strait of Hormuz. Prime Minister Ali al-Zaidi returned from Washington last week with 48 agreements signed with American firms, spanning energy, healthcare and technology and worth more than $60 billion, according to Reuters, including tie-ups involving ExxonMobil, Shell, Halliburton, KBR and GE Vernova. The centrepiece is a deal with Syria to rebuild the long-dormant pipeline running from the Kirkuk fields to the Mediterranean port of Baniyas, a project Iraqi state media says Chevron will execute and which the US State Department, welcoming the plan, called "a critical energy corridor" with an initial capacity of 2 million barrels a day. Baghdad is also weighing a line from Basra to Jordan's Aqaba. Washington's ambassador to Turkey, Tom Barrack, predicted the agreements would render the Strait of Hormuz "an afterthought". Go to accessibility shortcuts Share Comments Add Euronews on Google Read more Economy Cost of pay gap in the EU: Women earn €3,900 less than men a year Business EU approves Paramount's Warner Bros. Discovery deal with conditions Economy New UK PM touts 'cost of living government' with tax cut and £2 buses Iran war Strait of Hormuz Oil Houthis Gulf of Oman Red sea