Iran blocks Strait of Hormuz, but Gulf countries have backup plan to keep oil flowing, Saudi Arabia, UAE and Iraq are building…

The ongoing war between Iran and the US have raised concerns over global oil supplies after Tehran blocked the Strait Of Hormuz and warned ships passing through the region. However, Gulf countries are now working on alternative routes to ensure that crude oil exports continue even if the important waterway remains closed for a longer period.

Countries including Saudi Arabia, the United Arab Emirates (UAE) and Iraq are developing new pipelines and expanding existing networks to reduce their dependence on the Strait Of Hormuz, one of the world’s most important oil chokepoints.

Why is Strait Of Hormuz so important for global oil supply?

The Strait Of Hormuz connects the Persian Gulf with the Gulf of Oman and the Arabian Sea. It is a crucial route for oil exports from major producers including Saudi Arabia, UAE, Iraq, Kuwait and Qatar.

Before the current conflict, around 20 per cent of the world’s oil supply passed through this narrow waterway. Any prolonged disruption could impact global energy markets and increase crude oil prices, especially affecting oil-importing countries in Asia.

To avoid such risks, Gulf nations have started strengthening alternative export routes.

How are Saudi Arabia and UAE planning to bypass Hormuz?

Saudi Arabia already operates the East-West Pipeline, which connects its eastern oil fields with the Yanbu port on the Red Sea coast. Through this route, crude oil can be transported to international markets without passing through the Strait Of Hormuz.

The UAE is also expanding its Fujairah oil pipeline network. Fujairah is located outside the Strait Of Hormuz and allows Abu Dhabi to export crude oil through a safer alternative route.

The UAE’s state-owned oil company is working on a new 300-kilometre pipeline project worth around $3 billion. The project aims to increase oil transportation capacity to Fujairah by more than 1.2 million barrels per day and is expected to be completed by 2027.

Can Iraq also create a new oil corridor?

Iraq is also changing its oil export strategy. The country is working with international companies on pipeline projects connecting its southern oil fields with ports in Turkey, Jordan and Syria.

A proposed pipeline from Basra could transport crude oil to Turkey’s Ceyhan port on the Mediterranean coast. Another route could connect Iraq with Syria’s Banias port, creating a new energy corridor.