Full Breakdown
Gulf Nations Accelerate Pipeline Projects to Bypass the Strait of Hormuz
7/24/2026, 1:10:34 PM
Core Event: Rapid Expansion of Alternative Oil Export Routes
Amid a renewed blockade of the Strait of Hormuz, oil-producing Gulf states are expediting pipeline projects that would reroute crude toward the Red Sea, the Gulf of Oman and the Mediterranean. Saudi Arabia, the United Arab Emirates (UAE) and Iraq each seek to add millions of barrels per day (bpd) of capacity that can operate independently of Hormuz-bound shipping.
Background & Context
Before the conflict, roughly 15 million barrels of Gulf oil passed daily through the strait, about one-fifth of world trade. The war’s resurgence exposed that reliance, prompting governments and analysts to identify “escape valves” for continued exports. Existing routes—the Saudi East-West pipeline and the UAE’s Fujairah line—already operate near full capacity.
Data & Statistics
- Spare capacity of existing pipelines: 3.5–5.5 million bpd pre-war, now running close to full capacity, moving about 6.5 million bpd.
- Abu Dhabi’s new pipeline: A $3 billion, 300-km line parallel to the Fujairah route, designed to lift deliveries by more than 1.2 million bpd; construction is roughly half complete.
- Iraqi export projects: A Basra-to-Ceyhan pipeline (with a branch to Baniyas, Syria) could eventually move 2 million bpd; a Basra-to-Aqaba line is under discussion. Analysts project all new projects could add 3.8 million bpd by the end of next year and 7.3 million bpd by 2028.
- Potential bypass share: If fully realized, the alternative routes could carry about 60 % of the Gulf’s pre-war export volume of 23 million bpd.
Official Statements & Responses
U.S. Energy Information Administration data confirm the pre-war spare capacity of 3.5–5.5 million bpd for the Saudi and UAE pipelines and indicate both are now operating near full capacity. The U.S. State Department described the Basra-to-Baniyas corridor as “a critical energy corridor,” highlighting its strategic importance for diversifying export pathways.
Iran-backed Houthi rebels in Yemen have announced attacks on two Saudi tankers in the Red Sea, underscoring the vulnerability of alternative routes. The group previously forced a shutdown of the Saudi East-West pipeline with a drone strike in 2019, showing that pipelines remain exposed to regional conflict.
On-the-Ground Reports
Houthi forces reported setting fire to the Saudi tankers *Encelia* and *Layla* in the Red Sea; Saudi state media confirmed a blaze on the *Encelia* with no casualties. The UK Maritime Trade Operations centre logged an “unknown projectile” strike near Al Shuqaiq, illustrating security risks for the Red Sea corridor.
What’s Next
The Abu Dhabi pipeline is slated for completion in early 2027, with Kpler expecting a slip to mid-2027 to accommodate expansion of the Fujairah port. Iraqi pipeline initiatives aim to add 3.8 million bpd by the end of next year and reach 7.3 million bpd by 2028. Ongoing monitoring of Houthi activity and the operational status of existing pipelines will determine the effectiveness of these alternative export routes.
