Gulf States Rush to Build Alternative Oil Routes Amid Hormuz Crisis

The ongoing conflict between the U.S., Israel, and Iran has led to a significant disruption in oil and gas flows from the Persian Gulf. This has resulted in soaring energy import bills for countries that rely on these exports.

The global total energy import bill increased by $330 billion over six months, according to a report from the Centre for Energy Research and Clean Air. The closure of the Strait of Hormuz has forced oil producers to find alternative routes, with Saudi Arabia rerouting its export flows to the Red Sea through its East-West pipeline.

However, due to concerns about the safety of the Red Sea route, Saudi Arabia had to reroute again, this time to the Suez Canal. The UAE is planning to double the capacity of its pipeline to Fujairah port city, while ADNOC plans to build a new project, the West-East 1 Pipeline.

The U.S. has expressed support for the ADNOC pipeline expansion project, which is expected to cost at least $15 billion and take four years to complete. In contrast, Iraq is exploring an alternative route through Syria, with the goal of repairing an old pipeline that has not been used in 20 years.

Kuwait, Qatar, and Saudi Arabia are also investing in port infrastructure and expanding their regional pipeline network as a hedge against future disruptions. Japan has agreed to provide financial support for this expansion.