Full Breakdown
Saudi Arabia Plans Major Expansion of East-West Pipeline to Bypass Strait of Hormuz
7/8/2026, 8:36:57 AM
Background: War-Induced Vulnerabilities in Hormuz Shipping
During the February 2026 Iran-U.S. war Iran blocked the Strait of Hormuz, cutting commercial tanker traffic to roughly one-third of pre-war levels (?27 vessels per day versus 84). War-risk insurance premiums rose eightfold, prompting Saudi Arabia to rely on its 7 million-bpd East-West pipeline to the Red Sea.
Key Players and Proposed Routes
Saudi Arabia is holding talks with Kuwait and the United Arab Emirates to boost the East-West line. Kuwait’s CEO Sheikh Nawaf al-Sabah confirmed discussions. Israeli Energy Minister Eli Cohen proposed a 700-km land corridor from Saudi Arabia to Eilat, linking to Israel’s Trans-Israel pipeline. Qatar is assessing a Saudi-based LNG route.
Pipeline Capacity and Current Shipping Data
Sources say the Saudi expansion could add 1–2 million bpd, via upgrades or a parallel line. The existing line moves about 2 million bpd to western refineries and 5 million bpd for export. Since the June 17 ceasefire Saudi crude through Hormuz totals ~34 million barrels. The UAE’s Habshan-Fujairah line, now 1.8 million bpd, will double capacity next year.
Official Statements & Responses
Saudi officials label the plan a long-term strategic investment to cut Hormuz dependence. Kuwait’s Sheikh Nawaf al-Sabah confirmed joint pipeline talks. Iran’s ambassador Abdolreza Rahmani Fazli warned that vessels from friendly nations, such as China, may receive preferential treatment under Iran’s proposed service-fee regime for Hormuz transits.
Criticism, Opposition, and Competitive Dynamics
Analysts caution that expanding pipeline capacity could spark a price-war among Gulf exporters. Qatar faces technical barriers to route LNG through Saudi infrastructure. The proposed Saudi-Israel corridor also raises geopolitical sensitivities, given historic regional tensions.
Conflicting Reports & Information Gaps
Sources disagree on whether Saudi plans involve a new parallel line or refurbishment of the existing route. Capacity estimates vary between 1 million and 2 million bpd, and costs are described only as “billions of dollars” over a multi-year period. Financing, regulatory approvals and the exact Saudi-Israel route remain undisclosed.
Verbatim Quotes
- “The Gulf countries do not want to be dependent on either Iran or the Houthis (in Yemen) when it comes to their oil exports, which are their primary source of income,” — Eli Cohen, Israeli Energy Minister
- “If you create a land route, you bypass both Iran and the Houthis... The best route is through the State of Israel.” — Eli Cohen, Israeli Energy Minister
- “Cohen said he has suggested to the US a 700-km-long pipeline that could run from Saudi Arabia to Eilat.” — Eli Cohen, Israeli Energy Minister
- “We are discussing with our Saudi and Emirati brothers ways to expand pipelines to accommodate Kuwaiti crude.” — Sheikh Nawaf al-Sabah, CEO, Kuwait Petroleum Corporation
Outlook: Upcoming Developments
Saudi Arabia aims to complete feasibility studies and negotiate cost-sharing with partners within 12–18 months. The UAE’s Fujairah pipeline is slated for 2027 operation, potentially reshaping export flows. Ongoing U.S. diplomatic efforts on Hormuz security will influence any Saudi-Israel land corridor.
