Countries across the Persian Gulf are accelerating efforts to reduce their dependence on the Strait of Hormuz, one of the world’s busiest oil shipping routes. The move comes after repeated attacks on commercial vessels and disruptions linked to Iran, raising concerns about the security of global energy supplies.
Before the recent conflict, around one-fifth of the world’s oil exports passed through the narrow waterway. Gulf nations are now investing heavily in alternative transport routes to protect exports and reduce the risk of future disruptions.
Iran’s Growing Influence Raises Concerns
Iran has announced plans to impose tolls on ships passing through the Strait of Hormuz, a decision that could bring in billions of dollars. The country has also faced accusations of demanding large payments from some oil tankers in return for safe passage.
These developments have encouraged neighbouring oil-producing countries to speed up projects that bypass the strait.
Major Pipeline Projects Underway
UAE and Iraq have already begun constructing large pipeline networks designed to transport crude oil without using the Strait of Hormuz. Saudi Arabia is also considering expanding its own pipeline infrastructure.
According to Goldman Sachs analyst Alexandra Paulus, enough new pipeline capacity could be available by the end of 2027 to redirect nearly 45 per cent of the Gulf’s pre-war oil exports away from the strait.
The investment bank also estimates that by the end of 2028, alternative export routes could carry up to 7.3 million barrels of oil each day, allowing around 60 per cent of Gulf oil exports to avoid the Strait of Hormuz.
UAE Expands Export Infrastructure
The UAE’s West-East Pipeline project is around halfway complete, with Crown Prince Sheikh Khaled bin Mohamed bin Zayed directing officials to finish the project by 2027. Once completed, the 252-mile pipeline will operate alongside the existing Fujairah pipeline, increasing the UAE’s land-based oil export capacity to 3.6 million barrels per day.
Abu Dhabi National Oil Company chief Sultan Al Jaber said the latest regional tensions had confirmed the country’s long-term strategy. “Right now, too much of the world’s energy still moves through too few choke points. That is exactly why the UAE made the decision more than a decade ago to invest in infrastructure that bypasses the Strait of Hormuz,” he said.
Iraq And Saudi Arabia Expand Their Plans
Iraq has started work on the 435-mile Basra-Haditha pipeline, which will eventually connect to Jordan, Syria and Turkey. The pipeline is expected to transport 2.5 million barrels of oil per day. Iraqi PM Mohammed Shia al-Sudani has described the project as an important measure to safeguard the country’s oil exports from regional instability.
Construction began in May, with around USD 1.5 billion allocated to the project. However, officials have not confirmed when it will be completed. Saudi Arabia is also examining plans to increase the capacity of its crude oil pipeline leading to the Red Sea to 9 million barrels per day, although discussions remain at an early stage.
UAE Plans New Arabian Sea Port
Alongside pipeline investments, the UAE is preparing plans for a major new port and container terminal on the Arabian Sea side of the Strait of Hormuz.
The proposed facility would provide another route for cargo entering the Gulf without passing through the strait and could eventually compete with Dubai’s Jebel Ali port.
Strait of Hormuz Will Remain Important
Despite billions of dollars being invested in new infrastructure, experts believe the Strait of Hormuz will continue to play a vital role in global energy trade.
Between 7 million and 9 million barrels of oil and refined products are still expected to pass through the waterway each day. In addition, some of the new export routes depend on safe shipping through the Red Sea, where Iran-backed Houthi rebels in Yemen have recently threatened vessels near the Bab el-Mandeb Strait. While Gulf nations are creating new export options to reduce risks, analysts believe the Strait of Hormuz will remain one of the world’s most important energy routes for years to come.
First published on: Jul 16, 2026 06:55 AM IST
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