Middle East oil producers step up plans to bypass the Strait of Hormuz

Before the war in Iran, roughly 15 million barrels of Persian Gulf oil were shipped each day through the Strait of Hormuz. Within a few years, much of that oil could bypass the strait.

As Iran's chokehold on the strait drags on and oil prices surge — to over $100 per barrel for Brent Crude on Thursday — countries across the Gulf are planning to spend billions of dollars building pipelines to enable them to redirect more supplies to ports along the Red Sea and the Gulf of Oman.

At least seven major pipeline projects are under construction, in the planning stage or being discussed as possibilities, according to government officials, oil companies and analysts. The war has been a wake-up call for Gulf oil producers, who are determined to become less dependent on a transit point that hugs Iran's coast.

Some alternative routes will take the oil on longer, more expensive paths to market. Regardless, producers have realized that relying so heavily on the Strait of Hormuz "is no longer a prudent long-term strategy," said Victoria Grabenwöger, senior research analyst at data firm Kpler.

The Saudis' East-West pipeline carries oil across the desert nation from a processing facility in Abqaiq to the city of Yanbu on the Red Sea coast. Once there, it is loaded onto tankers that head either south to the Arabian Sea or north to the Suez Canal.

The United Arab Emirates has been sending more oil to the port of Fujairah, which abuts the Gulf of Oman, about 90 miles south of Hormuz.

Combined, the two pipelines had spare capacity of about 3.5 million to 5.5 million barrels per day before the war began, according to the U.S. Energy Information Administration. The two pipelines are now running near full capacity.

The state-owned oil company of Abu Dhabi, one of the UAE's seven emirates, is accelerating construction of a $3 billion, 200-mile pipeline to Fujairah. That pipeline, which will run parallel to an existing one, aims to increase oil supplied to Fujairah by more than 1.2 million barrels a day.

The project, which started before the war, is now reportedly about halfway completed, according to Kpler. The pipeline is intended to be completed by early 2027, but Kpler says mid-2027 is more likely given the need to expand the port at Fujairah.

The ambitious timeline "has only become feasible against the backdrop of the Strait of Hormuz blockade," Kpler's Grabenwöger said.

In Iraq, officials are ramping up plans to develop alternative export routes for southern oil fields around Basra. Iraq is so dependent on the Strait of Hormuz that it has had to scale back product