Gulf Producers Diversify Export Routes Amid Ongoing Strait of Hormuz Disruptions

The Strait of Hormuz, a critical waterway for global oil trade, has been largely obstructed since hostilities broke out. Approximately 15 million barrels of Gulf crude traversed this maritime bottleneck daily before the conflict, representing about one-fifth of the world's traded oil during peacetime.

Despite high prices remaining above $90 per barrel, at least seven significant pipeline initiatives are currently being built or discussed to channel supplies through the Red Sea, Suez Canal, and Gulf of Oman. The East-West pipeline in Saudi Arabia, constructed in the 1980s, transports crude from Abqaiq to Yanbu on the Red Sea.

The UAE has been directing more oil to Fujairah, its port on the Gulf of Oman located about 145 kilometers south of the Strait of Hormuz. According to the US Energy Information Administration, these two links together had spare capacity of roughly 3.5 to 5.5 million barrels per day before the war.

Abu Dhabi's state oil company is rushing to complete a project initiated before the conflict, which will increase deliveries by more than 1.2 million barrels per day when finished. However, delays are anticipated due to necessary port expansion.