Full Breakdown
Hormuz War Spurs Massive Push for Alternative Oil Export Routes
8/13/2026, 2:22:53 AM
Core Disruption: War Curtails Hormuz Shipping
The war between the United States and Iran has turned the Strait of Hormuz from the world’s most efficient oil conduit into a high-risk corridor. At least 17 seafarers have been killed as tankers navigate a “gantlet” of Iranian attack drones or sail with AIS transponders off. Before the conflict, roughly 20 million barrels of oil and petroleum products—about 20 % of global consumption—passed through the strait each day.
Alternative Pipelines and Red Sea Bypass
Saudi Arabia’s East-West Pipeline
Saudi Arabia has redirected a large share of its crude through the East-West Pipeline to Yanbu. In April-May, Gulf-coast shipments fell from 47.5 million tons a year earlier to 6.3 million tons, while Red Sea exports rose from 29.6 million to 54.8 million tons, adding 25.2 million tons.
United Arab Emirates (UAE) Limits
The Abu Dhabi Crude Oil Pipeline (ADCOP) moves crude from Habshan to Fujairah, but attacks on Fujairah have shown the route remains vulnerable. UAE traffic through the Persian Gulf dropped from 68.5 million tons to 12 million tons, and shipments through alternative UAE ports fell from 13.7 million to 6.3 million tons.
Iraq’s Expanding Pipeline Network
Iraq is pursuing a $15 billion pipeline system to move up to 2 million barrels per day of Basra crude northward, supplementing the existing $4.6 billion Basra-Haditha line. Production stands at 2.7 million bpd, but March exports collapsed from 101.7 million barrels a year earlier to 17.4 million barrels.
U.S.–Saudi–Israel “MERA” Project
A private consortium announced a $5 billion integrated refinery and export corridor outside the strait, targeting a 200,000 bpd facility with deep-water port and storage. Mechanical completion of Phase One is projected for the end of 2029.
Official Statements & Responses
U.S. President Donald Trump asserted that the U.S. Navy “has mine-swept the entire strait,” emphasizing continued American control. Saudi officials have highlighted the East-West Pipeline as a “strategic backup” now carrying the bulk of the kingdom’s exports.
On-the-Ground Reports
Iranian-backed Houthi rebels have intermittently blocked Red Sea traffic at Bab al-Mandab, creating a secondary chokepoint. The Emirati port of Fujairah suffered a drone strike, illustrating that ports outside the strait remain within range of regional missiles and drones.
Conflicting Reports & Gaps
Sources differ on unused pipeline capacity. The U.S. Energy Information Administration cites ? 4.7 million bpd of existing bypass capacity, while industry estimates of new pipelines suggest a combined capacity still short of the ? 20 million bpd currently transiting the strait. The final location of the MERA refinery has not been disclosed.
What’s Next
The MERA consortium plans to complete engineering design and begin site diligence in the coming months, with Phase One slated for mechanical completion by the end of 2029. Iraq’s oil ministry expects its new north-bound pipeline to enter tender later this year, while Saudi Arabia aims to restore Gulf-to-Red Sea shipments to around 300,000 bpd in August, according to Kpler data. Continued Houthi activity and the unresolved Hormuz closure suggest alternative routes will remain a priority for Gulf exporters.
