Middle Eastern oil producers are accelerating plans to build pipelines to circumvent the Strait of Hormuz, with seven major projects either under construction, in planning, or under discussion. This comes as a direct response to increased geopolitical risks, particularly Iran's influence over the strait, which has served as a "wake-up call" for Gulf oil producers regarding their reliance on this critical transit point. The goal is to redirect oil supplies to ports on the Red Sea, Gulf of Oman, and Mediterranean, despite these alternative routes often being longer and more expensive.
Combined, existing pipelines before the recent conflict had a spare capacity of 3.5 million to 5.5 million barrels per day (bpd), but are now operating near full capacity. Analysts suggest that the new projects could add an additional 3.8 million bpd by the end of next year and 7.3 million bpd by the end of 2028. Goldman Sachs analysts estimate that these bypass projects could enable approximately 60% of the Gulf's pre-war exports of 23 million bpd to avoid the Strait of Hormuz if necessary. Victoria Grabenwöger, a senior research analyst at Kpler, notes that relying so heavily on the Strait of Hormuz "is no longer a prudent long-term strategy."
Specific projects include Abu Dhabi's state-owned oil company accelerating construction of a $3 billion, 300-kilometer (200-mile) pipeline to Fujairah. This pipeline, running parallel to an existing one, aims to increase oil supplied to Fujairah by over 1.2 million bpd. The project, initiated before the conflict, is reportedly halfway complete, with an expected completion by early to mid-2027. Iraq is also pursuing a pipeline from Basra to Ceyhan, with a proposed extension to Baniyas in Syria, capable of transporting 2 million bpd. Additionally, Iraqi officials are discussing a project to build a pipeline from Basra to Aqaba, from where oil could be exported via the Red Sea and Suez Canal.
