Middle East Oil Producers Face Reckoning After Iran War Exposes Chokepoint Risks
Middle East oil producers are facing a reckoning after the Iran war exposed the dangers of relying on a single chokepoint for vital exports. The Iran war showed that even a near-airtight blockade using cheap drones and mines can have devastating consequences, stranding a fifth of the world's oil and liquefied natural gas supplies.
Saudi Arabia has benefited from its foresight in building cross-country pipelines to hedge against such scenarios. The country diverted 60% of its shipments to the Red Sea port of Yanbu before the war, and its economy is expected to grow by 3.1% in 2026, down just 1.4 percentage points from its pre-war forecast.
Other regional players are taking note, with the UAE partially bypassing Hormuz using its pipeline to Fujairah oil terminal. Abu Dhabi is accelerating construction of a second pipeline to double export capacity via Fujairah by 2027.