Oil pipelines, ports, new corridors. Alternative routes in the Middle East to render the Strait of Hormuz redundant

Restoring oil exports to pre-war levels whilst bypassing the Strait of Hormuz is no simple task; for months, the Gulf states have been investing in logistics infrastructure to avoid a route through which, prior to the outbreak of the conflict between the United States and Iran in February, 20 per cent of the world’s crude oil and liquefied natural gas passed. Yesterday, Georges Elhedery, chief executive of the HSBC banking group, told Reuters that investments in alternative logistics routes in the Gulf – designed to mitigate the impact of the war with Iran – could render Hormuz ‘superfluous’ within the next five years, now that even the route which was gaining greater strategic importance due to the blockade of Hormuz, the Bab el-Mandeb Strait, is now also under threat from Houthi attacks. Elhedery was among the global financiers expected to attend Saudi Arabia’s leading investment conference, the ‘Davos of the Desert’, scheduled for 26 October and postponed yesterday until 2027 precisely because of the attacks by the Yemeni group.

Riyadh took months to reorganise crude oil flows. When Iranian attacks on ships blocked the Strait of Hormuz, it diverted millions of barrels via the East-West pipeline to the port of Yanbu on the Red Sea. However, the state-owned oil company Saudi Aramco and merchant ships linked to the kingdom have become the favourite targets of Houthi missiles near Bab el Mandeb, and many Saudi shipments have therefore been diverted northwards, via Egypt, using the Suez Canal and the Sumed pipeline system. Meanwhile, the Ras Tanura terminal in the Persian Gulf has resumed operations following a suspension of almost four months. Saudi Arabia is thus increasingly relying on a complex system: it loads crude oil at Ras Tanura, transports it through the Strait of Hormuz, transfers it to other vessels off the coast of Oman for distribution to customers on global markets, and then returns to restock.

Iraq, too, is exploring various strategies to diversify its export routes. One of these routes passes through the Turkish port of Ceyhan, on the Mediterranean, where some of Iraq’s oil is already shipped. Baghdad is also considering reviving a long-shelved project for an oil pipeline to the Jordanian port of Aqaba, on the Red Sea, and is working with Syria on a new pipeline that would carry Iraqi crude westwards to the Mediterranean. Last month, Lebanese and Syrian officials inspected a potential railway route to link the Lebanese port of Tripoli to Homs in Syria, and the Washington Post mapped out the route that Syrian President Ahmed al Sharaa proposed as a relatively stable land corridor for the transport of energy and goods, as well as an alternative to Hormuz: from Basra to the Mediterranean port of Baniyas, which would provide access to Europe. In July, the United States also announced its support for a new oil pipeline led by Chevron, which would transport 2 million barrels of crude oil a day from Basra, in southern Iraq, to Baniyas, following the same route as the lorries that currently carry diesel across the desert. Donald Trump’s special envoy, Tom Barrack, said that the pipeline would help make the Strait of Hormuz “much less relevant very soon”.

The United Arab Emirates have given this strategy the name ‘Zero Hormuz’, which involves investments of tens of billions of dollars in ports, oil pipelines and other alternative logistics infrastructure, and is overseen by the Crown Prince of Abu Dhabi, Sheikh Khaled bin Mohamed al Nahyan, through a sovereign wealth fund he heads. At the heart of the plan is the port of Fujairah, one of the country’s poorest emirates, where Abu Dhabi had already opened an oil pipeline in 2012, with a capacity of up to 1.8 million barrels a day, which already allows traffic to bypass the Strait thanks to its location: outside the Strait of Hormuz, Fujairah offers the Emirates much more than just an energy reserve. Months ago, Abu Dhabi announced that it would speed up the construction of a second oil pipeline to double crude oil export capacity via Fujairah by 2027, and according to some reports, it is said to be considering a third pipeline and other options to support exports of petrochemicals, LNG and other energy products. Last week, the emeritus chairman of the energy consultancy FGE, Fereidun Fesharaki, told Semafor that plans are in place for a new liquefied natural gas plant, a refinery and “a much larger port” to secure export routes, storage and maritime transport in the Gulf of Oman.