Hormuz Risk Persists Despite Bypass Routes

The Strait of Hormuz remains a critical chokepoint for global oil trade despite alternative export routes being developed by Saudi Arabia and the UAE.

According to UniCredit, these alternatives can reduce the risk associated with Hormuz but cannot fully replace the volumes normally carried through the strait.

Hormuz typically handles around one-fifth of global oil trade, making it one of the world's most important energy chokepoints.

The East-West pipeline to the Red Sea, which can transport around 5 million barrels per day, and the UAE's route to Fujairah on the Gulf of Oman, carrying roughly 1.5-1.8 million barrels per day, have been increasingly used by Gulf producers to bypass Hormuz.

However, UniCredit notes that these alternatives are not a complete solution, as they still carry significant geopolitical risk and may simply move the vulnerable point elsewhere.