Gulf Energy Landscape Crumbles as War Rages On

The Gulf region's energy landscape is facing unprecedented challenges due to the ongoing war between Iran, Israel, and the United States. The assumption that oil and gas could always find a route to global markets has been shattered.

The Strait of Hormuz, which previously carried around 20 million barrels of oil per day, remains the central vulnerability. Before the current conflict, Qatar and the UAE relied heavily on the strait for LNG exports, accounting for almost 20% of global LNG trade.

The East-West pipeline in Saudi Arabia was seen as a safe alternative to bypass Hormuz, but it has also been targeted by drone strikes, forcing the kingdom to temporarily shut it down. This route had carried around 4-5 million barrels per day, equivalent to 4-5% of global supply.

The Red Sea is another critical route, but ships leaving its ports must pass through the Bab al-Mandeb strait, which has been threatened by Houthi gains in Yemen. This creates a 'second jaw' that can choke off Gulf energy exports if Hormuz remains restricted.