Gulf Oil Producers Bet Big on Pipeline Projects to Bypass Strait of Hormuz

Middle East oil producers are investing billions of dollars in pipeline projects to bypass the Strait of Hormuz, which has been a chokepoint for global energy supplies. The region's major oil exporters, including Saudi Arabia and the United Arab Emirates, aim to reduce their reliance on the strait after years of disruptions caused by Iran's influence over shipping through the waterway.

According to analysts at Goldman Sachs, new pipeline projects could carry an additional 3.8 million barrels per day by the end of next year and 7.3 million barrels per day by the end of 2028. This would mean that about 60% of the Gulf's total prewar exports of 23 million barrels a day could bypass Hormuz if needed.

However, these alternative routes are not without risks. Pipelines from Saudi Arabia to the Red Sea will be vulnerable to attacks by Houthi rebels in Yemen, which have disrupted shipping before at the Bab el-Mandeb Strait.