Can Strait of Hormuz Become ‘Redundant’ in 5 Years as Iran War Drags On? Here are the alternative routes for the Gulf States | Today’s news
The Strait of Hormuz, one of the world’s most critical energy bottlenecks, could become “redundant” within five years as Gulf countries invest in alternative pipelines, ports and logistics networks, HSBC Group CEO Georges Elhedery said on Tuesday, according to Reuters.
The Iran war exposed the risks of relying on the narrow waterway for energy exports, prompting regional governments to explore routes that can transport oil to international markets without going through the strait.
“We see this region being able to recover and then continue to grow. It will mean a lot of investment,” Elhedery said at the HSBC Future Forum in Dubai.
“Of course we wish and hope to see a resolution to the conflict… But Hormuz, probably in five years, may become redundant,” he added, according to Reuters.
Alternatives to Hormuz are not entirely new. Saudi Arabia and the United Arab Emirates (UAE) already operate pipelines that bypass the strait. The bigger question is whether expanding these routes and building new infrastructure can significantly reduce the Bay’s dependence on the waterway.
Diversification of supply routes could help reduce some of these risks.
1. Saudi Arabia’s East-West Pipeline: From the Persian Gulf to the Red Sea
Route: Abqaiq in eastern Saudi Arabia to Yanbu on the Red Sea coast.
Saudi Arabia’s East-West pipeline, also known as Petroline, is one of the most significant existing alternatives to the Strait of Hormuz.
The pipeline transports oil from processing facilities in eastern Saudi Arabia across the Arabian Peninsula to Yanbu. From there, oil can be loaded onto tankers and transported to international markets without passing through Hormuz.
The pipeline gives Saudi Arabia the ability to divert significant volumes of oil to the Red Sea, reducing its dependence on Gulf shipping routes.
Shipping in the Red Sea also faces security risks due to the Iran-aligned Houthis.
2. UAE Habshan-Fujairah Gas Pipeline: Bypassing the Strait
Route: Habshan in Abu Dhabi to Fujairah in the Gulf of Oman.
The UAE has another major alternative in the Abu Dhabi Pipeline, also known as ADCOP.
The approximately 400 km pipeline connects the offshore oil facilities in Habshan to Fujairah, which lies outside the Strait of Hormuz. The pipeline reportedly has a capacity of around 1.8 million barrels per day.
The UAE already uses this route to export oil.
Fujairah allows the UAE to load oil onto tankers without sending them through Hormuz. Expanding pipeline capacity, storage facilities and port infrastructure could help the country sustain exports during future outages.
3. More pipelines, ports and logistics infrastructure
In addition to existing pipelines, Gulf countries could invest in additional pipeline capacity, export terminals, storage facilities and transport links connecting oil-producing regions to ports outside the strait.
The goal would be to build greater redundancy in regional energy supply chains.
New routes would also have to be commercially viable and able to reliably handle large volumes.
4. Can IMEC offer an alternative to Hormuz?
The India-Middle East-Europe Economic Corridor (IMEC), announced at the G20 summit in New Delhi in September 2023, is another connectivity initiative that is gaining attention amid instability in the Middle East.
The proposed corridor aims to connect India with the Persian Gulf and Europe through an integrated network of sea lanes, ports, railways and other infrastructure. Its broader aim is to improve trade and logistics links between the three regions.
Ongoing crises in the Middle East, including the war in Gaza, tensions involving Iran and the risk of disruption around the Strait of Hormuz have strengthened the case for more resilient trade routes, according to Gérard Mestrallet, the French president’s special envoy for IMEC.
“The difficulties – October 7, Gaza, Iran, Hormuz – have even increased the need to have a resilient corridor that offers several options to the market,” Mestrallet said.
For India, IMEC’s potential lies in enhancing connectivity with the Gulf markets and Europe.
However, this is a proposed multi-modal trade corridor, not a functioning pipeline designed to carry the volumes that are currently transported through the strait.
Can these alternatives really make Hormuz redundant?
Existing pipeline alternatives offer a way to redirect some oil exports, but they cannot yet replicate the scale of flows through the Strait of Hormuz.
The IEA estimates that Saudi Arabia and the United Arab Emirates have a combined 3.5 million to 5.5 million barrels per day of potential capacity on alternative routes that could bypass the strait. This compares to around 20 million barrels per day of oil shipments passing through Hormuz in 2025.
The agency also warned that the logistics needed to divert and export large volumes had not been thoroughly tested.
There is another important limitation: bypass pipelines primarily deal with the export of oil. They do not automatically provide an alternative for all LNG shipments passing through Hormuz, including shipments from Qatar. Exporting gas requires specialized infrastructure.
Additional pipelines and export terminals could provide valuable flexibility during a crisis, but the scale of investment needed to replicate their role remains significant, making it unlikely that the Strait of Hormuz could be completely redundant in the near future.
With information from Reuters.
