Gulf States Scramble for Alternative Routes Amid Strait of Hormuz Uncertainty

The ongoing conflict in the Middle East has led to a surge in efforts by Gulf states to find alternative routes for their oil exports, particularly through the Strait of Hormuz. The waterway, which connects Iran and Oman, is one of the world's most critical shipping lanes, carrying around 20% of global crude exports from the Persian Gulf to markets in Europe, Asia, and North America.

Saudi Arabia has been at the forefront of this effort, redirecting substantial volumes away from the Strait of Hormuz through its East-West Pipeline. According to data from the International Monetary Fund's Portwatch platform, Saudi cargo shipments from its Gulf coast fell from 47.5 million tons a year earlier to just 6.3 million tons in April and May.

This decline was more than offset by exports through the Red Sea, which rose from 29.6 million to 54.8 million tons during the same period. The shift shows that the East-West Pipeline is not merely an emergency backup but also a crucial tool for keeping Saudi oil flowing during a Hormuz closure.

The UAE has had less success in bypassing the Strait of Hormuz, despite possessing ports and pipelines specifically designed for this purpose. According to IMF data, UAE Persian Gulf coast traffic fell to 12 million tons from 68.5 million tons in April and May, while alternative UAE ports also saw a decline in shipments.

New pipelines are being discussed as potential solutions, including those connecting Iraq with Oman and Jordan. However, these projects would be expensive and take years to build, according to economist Hassan Mansour, who estimates that a Basra-Aqaba pipeline could require five to seven years and cost around $8 billion to $10 billion.