
Producers of oil and gas in the Middle East continue to hurriedly seek and widen alternative export pathways, nearly two months subsequent to the vital Strait of Hormuz being virtually closed to commercial navigation.
There remains scarce clarity on the timeline or manner in which the U.S.-Iran tensions could resolve, with both parties utilizing the Strait of Hormuz — a crucial channel through which approximately 20% of global oil was transported prior to the conflict — as a leverage point in intermittent peace discussions.
The ongoing double blockade of the channel has drastically elevated global energy prices and exposed the fragility of the global energy market, especially when essential maritime routes and “chokepoints” — like the Strait of Hormuz, Panama Canal, or Suez Canal — face blockages, whether deliberately or inadvertently.
Fatih Birol, Executive Director of the IEA, expressed to CNBC on Thursday that he felt like a “record on repeat” urging nations to diversify their energy transport routes long before the current crisis erupted.
“The $110 trillion global economy can be held hostage by just a handful of armed individuals over a mere 50-kilometer stretch of water — this is utterly irrational. We need to create alternative pathways, alternative solutions,” he relayed to CNBC’s Steve Sedgwick.
Concerns regarding the Strait of Hormuz “were thoroughly recognized” for years, according to Maisoon Kafafy, senior adviser to the Atlantic Council’s Middle East programs, yet the conflict has illuminated the depth of those vulnerabilities — and the pressing need for transformation.
“Hormuz has been recognized as the world’s most documented energy chokepoint for decades, and its risks were analyzed, modeled, and factored into the infrastructure investments throughout the region,” she stated.
“Before the closure in February 2026, while costs were substantial, they did not reach a level that warranted the extensive investment alternative infrastructure would require. The existing deterrent framework and economic ties surrounding the strait made a complete closure seem excessively costly for any party to consider seriously. The closure has shown that those perceptions were vulnerable,” Kafafy remarked.
The Iran conflict is altering that cost-benefit calculus, as Gulf oil exporters — now acutely cautious of the dangers posed by the Islamic Republic and apprehensive about future dependence on forces beyond their control — are decisively expanding their gaze beyond the Strait of Hormuz for their exports.
“The conflict has also expedited investments in alternate routes. Consequently, other nations are rerouting. This implies that Iran, along with its primary strategic influence, is diminishing,” Lucila Bonilla, lead emerging markets economist at Oxford Economics, informed CNBC on Tuesday.
Re-routing in progress
Tehran’s efforts to obstruct the crucial maritime route seemed to yield benefits during the initial stages of the conflict. By managing access in and out of the strait, Iran effectively became the sole exporter of hydrocarbons for several weeks as oil prices surged towards $120 a barrel.
The naval blockade imposed by the U.S. on Iranian ports, which commenced in mid-April, has “neutralized” that strategic edge, Bonilla indicated. Yet Gulf exporters remain in the same plight, hindered from sending oil and LNG through the strait.
While Saudi Arabia and the United Arab Emirates (UAE) possess some oil export routes that do not traverse the strait, other nations, including Iran, Iraq, Kuwait, Qatar, and Bahrain, depend on the passage to transport a large percentage of their oil exports, according to the International Energy Agency.
Most of these exports are directed towards Asia, with China, India, and Japan serving as the primary importers, the IEA notes. The majority of LNG exports from the UAE and Qatar also utilize this passage.
The enormous volume of oil that is exported via the Strait of Hormuz, alongside the limited alternatives to circumvent it, indicates that any interruption to these flows would have significant repercussions for global oil markets.The International Energy Agency
Iran has further alienated its Gulf neighbors and fellow OPEC members by striking their energy infrastructure with missiles and drones.
Gulf countries expressed to CNBC that Iran’s actions have fostered a significant trust deficit that may never be fully addressed, signaling their intention to seek lasting methods to redirect their supplies and avoid the Strait of Hormuz.
Capacity squeeze
Both Saudi Arabia and the UAE have oil pipelines designed to bypass the strait — the East-West pipeline and the UAE’s Habshan–Fujairah (or ADCOP) pipeline — but neither pipeline can accommodate as much oil as is transported through the Strait of Hormuz.
The East-West pipeline, which connects processing facilities near the Persian Gulf to an export terminal on the Red Sea, alongside the UAE pipeline that leads to Fujairah, has a combined projected capacity of 3.5 – 5.5 million barrels per day (mb/d), according to the IEA, although Saudi Arabia claimed it was transporting 7 mb/d in March.
However, these amounts pale in comparison to the roughly 20 million barrels of oil and petroleum products that flowed through the Strait of Hormuz daily before the onset of the war.
Establishing alternative export routes necessitates not just substantial investment in infrastructure, but also time. Frequently, international agreements are essential if pipelines traverse multiple regions, and security becomes a concern — particularly when Iran has shown no hesitance to attack neighboring energy facilities.
“Enhancing existing infrastructure … can occur within a fairly compressed timeframe if there is sufficient political will,” Kafafy conveyed to CNBC.
“The more challenging task is to develop a truly interconnected, multi-corridor system that provides genuine resilience,” including “route diversity” — ensuring that ample exit terminals are available in various sea basins to prevent a single blockage from impairing most of the export capacity simultaneously — and “exit-point security,” Kafafy elaborated.
This translates to “the capability to safeguard terminal infrastructure against the same adversarial pressures that shut down the primary chokepoint,” she added.
The conflict has demonstrated that the current alternative routes are vulnerable; Saudi’s East-West pipeline was struck by Iran in April, reducing throughput by 700,000 barrels per day. The Fujairah port (the terminus of the UAE pipeline) also faced assaults from Iranian drones, disrupting oil loading activities at its crude export terminal.
The IEA also highlights that an LNG pipeline runs in parallel to Saudi’s East-West pipeline, the Abqaiq-Yanbu NGL pipeline, which has a capacity of 300 kb/d, but is presently “fully utilized” with no available capacity.
Alternative alternatives
There are a few “alternative alternatives” to the principal pipelines, although their capacity remains limited.
Regardless, several Middle Eastern nations are investigating proposed new routes or reviving previously shelved projects, as they seek to diversify their supply routes away from the Strait of Hormuz.
For instance, Iraq possesses a nearly 600-mile pipeline to Turkey, which has an estimated capacity of around 1.6 mb/d. The pipeline, which had been inactive, is set to reopen soon due to the disruptions in Hormuz, reportedly starting with a capacity of 250,000 barrels per day.
Iraq is also contemplating long-considered pipelines to Oman, Jordan, and Egypt, despite these initiatives being previously set aside owing to financial, conflict, and security concerns.
Short-term expansion buys time and showcases political commitment, while long-term network development is the sole configuration providing resilience that is structural rather than situational.Maisoon KafafySenior advisor, Atlantic Council’s Middle East programs
Iran might consider utilizing the Jask oil terminal to bypass the Strait of Hormuz. The pipeline can convey crude from the Goreh-Jask pipeline to the Gulf of Oman and reports a capacity of 1 mb/d, but the IEA indicates that both the pipeline and terminal “effectively remain non-operational.”
“A test load was exported from Jask in late 2024, but no additional oil has been shipped from Jask since. The terminal is currently not viewed as a feasible export option for Iranian crude,” the IEA indicated in February.









