Hormuz Bypass Under Threat

The international energy industry has been solving a massive problem for months: what if oil can't safely move through the Strait of Hormuz? The answer was simple - find another way. Saudi Arabia redirected crude westwards across the Arabian Peninsula towards the Red Sea, while the United Arab Emirates used its pipeline to Fujairah on the Gulf of Oman.

Tankers performed ship-to-ship transfers outside the most dangerous waters, and Asian refiners found replacement crude. Iraq even began developing additional export options. While it was expensive, inefficient, and complicated, this workaround kept Middle Eastern oil flowing.

However, Iran's newly appointed security chief, Mohsen Rezaei, has issued a threat that changes the calculation. He warned neighboring countries that if they participate in the US economic campaign against Tehran, Iran is prepared to retaliate against alternative oil transportation routes outside Hormuz.