Gulf States Build Bypass Routes Amid Strait of Hormuz Risks

Gulf states are accelerating the construction of alternate oil routes to bypass the Strait of Hormuz, which exposed its geopolitical vulnerability during the Iran war. The strait accounts for 20% of global oil shipments.

The New York Times reported on August 12 that Gulf countries are building or expanding pipelines and other infrastructure to mitigate regional instability risks. This will cost billions of dollars in expenses over years but is seen as an essential hedging tool.

In the UAE, a second oil pipeline is being built in Fujairah alongside the existing one, which transports crude from Abu Dhabi's inland oil fields. The new project aims to double the bypass capacity around the Strait of Hormuz to 3.6 million barrels per day.

Aramco is speeding up the multibillion-dollar expansion of the East-West Pipeline, a 1,201-kilometer pipeline that runs across the Arabian Peninsula to the Red Sea port city of Yanbu. Saudi authorities are also working to secure an extra 1-2 million barrels per day of transport capacity.