Gulf States Explore New Oil Pipeline Routes to Bypass Strait of Hormuz

Gulf states are actively considering the construction of new oil pipelines that would transport crude oil via Haifa on the Israeli Mediterranean coast, aiming to reduce their dependence on the strategically vital Strait of Hormuz. This initiative arises amid ongoing concerns regarding Iranian disruptions in the Strait, which is a critical artery for global energy exports. The Financial Times reports that Saudi Arabia has been the only Gulf state to maintain a steady flow of oil exports, primarily due to its East-West pipeline that connects its oil fields to the Red Sea port of Yanbu, effectively bypassing the Strait.

Gulf countries consider potential Haifa pipeline route as alternative to Strait of HormuzThe Jerusalem PostGulf states consider new pipelines to bypass Strait of Hormuz - FTGulf states bypassing Strait of Hormuz: New pipeline plans explained

The East-West pipeline, built in the 1980s during the Iran-Iraq War, has proven essential, delivering approximately 7 million barrels of oil per day. As tensions in the region escalate, Gulf officials and energy leaders are discussing the expansion of this pipeline and the development of new infrastructure to ensure uninterrupted oil exports. The proposed projects include a network of pipelines, railways, and roads that would facilitate trade routes connecting the Arabian Peninsula to the Mediterranean.

The Jerusalem PostGulf states consider new pipelines to bypass Strait of Hormuz - FTGulf countries consider potential Haifa pipeline route as alternative to Strait of HormuzGulf states bypassing Strait of Hormuz: New pipeline plans explained

Israeli Prime Minister Benjamin Netanyahu has emphasized the need for rerouting energy pipelines westward to secure a free flow of oil and gas. He stated, “Long-term solutions include rerouting energy pipelines westward, across Saudi Arabia to the Red Sea and Mediterranean, bypassing Iran's geographic choke point.” Yossi Abu, CEO of NewMed Energy, supports this vision, arguing that such pipelines would empower regional nations to "control their own destinies." Christopher Bush, CEO of Cat Group, has also noted a surge in inquiries regarding pipeline projects, highlighting the growing interest in infrastructure development.

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Despite the enthusiasm for new pipeline routes, there are significant challenges. Gidon Bromberg, CEO of EcoPeace Middle East, pointed out that the success of these initiatives largely depends on Saudi Arabia's cooperation. He noted that while Israeli officials view the IMEC project as economically transformative, Saudi Arabia has yet to fully commit to the proposed routes. Additionally, the high costs and political complexities associated with constructing new pipelines pose substantial obstacles.

Gulf states bypassing Strait of Hormuz: New pipeline plans explained

While there is a consensus on the need for alternative routes, estimates regarding the costs of new pipeline projects vary significantly. Building a new pipeline could range from $5 billion for expanding the East-West pipeline to $20 billion for more complex multilateral routes. Security risks, including unexploded ordnance in Iraq and threats from militant groups, further complicate the situation.

Gulf states consider new pipelines to bypass Strait of Hormuz - FT

As Gulf states reassess their energy strategies, discussions are expected to continue regarding the feasibility of these new pipeline projects. The urgency of finding alternatives to the Strait of Hormuz has prompted a shift in focus from hypothetical plans to operational realities. The outcomes of these deliberations will likely shape the future of oil transportation in the region.

Gulf states bypassing Strait of Hormuz: New pipeline plans explained

• “In hindsight, the East-West pipeline looks like a genius masterstroke,” — Senior Gulf energy executive

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• “You need oil pipelines, railway connectivity throughout the region, onshore, without giving others bottlenecks to choke us.” — Yossi Abu, CEO of NewMed Energy

Gulf states bypassing Strait of Hormuz: New pipeline plans explained

• “Long-term solutions include rerouting energy pipelines westward, across Saudi Arabia to the Red Sea and Mediterranean, bypassing Iran's geographic choke point,” — Benjamin Netanyahu, Prime Minister of Israel

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• “The conversations have moved further down the chain," she said.” — Maysoun Kafafi, Atlantic Council advisor

Gulf states consider new pipelines to bypass Strait of Hormuz - FT