Gulf nations are accelerating the construction of pipelines to avoid the Strait of Hormuz as conflict with Iran intensifies. Recent efforts include a massive US-Iraq energy partnership and UAE expansions to secure oil flows away from the volatile chokepoint.
The $100 Barrel and the 15 Million Barrel Chokepoint
Brent crude has surged to $100 a barrel for the first time since May, according to the report, as the conflict with Iran escalates. This price spike underscores the extreme vulnerability of the Strait of Hormuz, which typically handles 15 million barrels of Gulf oil daily.. This maritime passage represents roughly one-fifth of all globally traded oil during peacetime, making any disruption a systemic threat to the global economy.
The current volatility has rendered the traditional reliance on this single channel a liability. With the US benchmark WTI also rising above $90 a barrel, energy exporters are treating the diversification of export routes not as a luxury, but as a survival mechanism. The shift represents a move away from the maritime risks that have historically allowed regional actors to leverage the chokepoint for political gain.
The $3 Billion Push Toward Fujairah and Yanbu
To mitigate these risks, the United Arab Emirates is investing $3 billion in a 300-kilometre pipeline to Fujairah. As reported, this project is currently half-completed, with a revised completion target of mid-2027 due to necessary port expansions. this effort complements Saudi Arabia's East-West pipeline, which transports crude from the Abqaiq complex to Yanbu on the Red Sea, a route established during the Iran-Iraq war of the 1980s.
Together, these two existing and expanding links currently move approximately 6.5 million barrels a day. By channeling oil to the Gulf of Oman and the Red Sea, the UAE and Saudi Arabia are effectively creating a safety valve that allows them to continue exports even if the Strait of Hormuz is completely closed.
Iraq's $60 Billion Bet on the Kirkuk-Baniyas Corridor
Iraq is pursuing the most aggressive diversification strategy because 90% of its state revenue depends on oil exports. Prime Minister Ali al-Zaidi recently secured over $60 billion in agreements with American companies, including ExxonMobil, Shell, Halliburton, KBR, and GE Vernova. These deals aim to modernize Iraq's infrastructure and decouple its economy from the volatility of the Persian Gulf.
The center-piece of this strategy is a deal for Chevron to rebuild a long-dormant pipeline running from the Kirkuk fields to the Mediterranean port of Baniyas in Syria. The US State Department has described this as a critical energy corridor, with an initial capacity of 2 million barrels a day. US Ambassador to Turkey Tom Barrack suggested that such moves could eventually make the Strait of Hormuz an "afterthought" in global energy logistics.
The Houthi Attacks on the Encelia and Layla
While pipelines offer an alternative to the Strait of Hormuz, they introduce new vulnerabilities in the Red Sea. Iran-backed Houthi rebels recently targeted the tankers Encelia and Layla, setting both on fire, according to the source. This volatility raises critical questions about the security of the Bab el-Mandeb Strait, a maritime chokepoint carrying 12% of world trade.
The shift to pipelines does not eliminate risk; it merely relocates it . A Houthi drone strike previously forced the Saudi East-West pipeline to shut down in 2019, proving that fixed infrastructure is just as vulnerable to asymmetric warfare as tankers are. It remains unverified how the US and Gulf nations plan to secure thousands of kilometers of pipeline from similar drone or sabotage attacks, and whether the Syrian government can guarantee the safety of the Kirkuk-Baniyas route given the region's instability.
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