Three Pipelines, One Goal: Escaping the Strait of Hormuz

The Strait of Hormuz has long been the single most important passage for global oil, but the events of 2026 are pushing Gulf producers to rethink how much they can afford to depend on it. Since the waterway was effectively closed to commercial traffic in early March 2026 during the war between the United States, Israel and Iran, exporters across the region have moved to accelerate pipeline routes that avoid the strait altogether.

The situation remains tense as of mid-July 2026. On 13 July, President Donald Trump declared the United States the guardian of the Strait of Hormuz and floated a 20 percent fee on all cargo passing through it. He reversed the toll plan the next day, saying it would be replaced by Gulf investment deals in the United States, but he kept a naval blockade aimed at Iranian shipping. That blockade took effect at 20:00 GMT on 14 July, and oil prices climbed to a one-month high as traders weighed the risk of a longer standoff.

The disruption so far has been severe. Industry figures point to more than 1 billion barrels of oil lost since the closure began, with close to 100 million barrels stranded each additional week the strait stays constrained. Saudi Arabia responded early by converting its East-West pipeline, also known as Petroline, to full capacity of about 7 million barrels per day on 11 March, moving crude from Abqaiq in the east to Yanbu on the Red Sea. An Iranian drone strike on a pumping station cut throughput by roughly 700,000 barrels per day on 9 April, but Saudi authorities said the line was back to full capacity by 12 April.

Much of the current attention is on the United Arab Emirates. A new parallel line to the existing Habshan to Fujairah route, referred to as the West-East pipeline, is now close to half built and is being fast-tracked on the orders of the country's leadership. Once complete, it would roughly double the volume the UAE can send past Hormuz to the port of Fujairah, lifting bypass capacity from about 1.8 million barrels per day to around 3.6 million. Developers are targeting an early 2027 start, though analysts see mid-2027 as more realistic because the Fujairah port itself needs to be expanded to handle the extra flow.

Saudi Arabia is looking further ahead. Officials have opened preliminary talks on adding 1 to 2 million barrels per day of capacity, most likely through a parallel products pipeline alongside the existing East-West route. The harder constraint is not the pipeline but the export terminals at Yanbu, where sustainable loading capacity sits at roughly 4.5 to 5 million barrels per day. Any real increase in throughput would first require upgrading the loading infrastructure there, which pushes a meaningful expansion to 2028 or later.

A third route is taking shape on the Mediterranean. In March 2026, Turkey proposed extending the Kirkuk to Ceyhan pipeline south to Basra, which would give Iraq a full Mediterranean outlet and sharply reduce its reliance on Hormuz. Iraq has also revived plans for a Basra to Haditha to Baniyas line running to the Syrian coast, and its cabinet has cleared the state Basra Oil Company to sign preliminary agreements with a Chevron-led consortium to study both options. If the feasibility work is finished by the end of 2026, construction could begin next year, although the projects themselves would still take another three to five years to complete.

None of these routes removes risk entirely. Tankers loading at Yanbu still have to sail through the Red Sea and past the Bab el-Mandeb strait, where Houthi attacks remain a threat, and fixed terminals at Yanbu, Fujairah and Ceyhan are themselves potential targets. Even so, analysts estimate that by the end of 2026 existing and new bypass capacity could shield more than 45 percent of pre-war Gulf exports from a future Hormuz shock, rising above 60 percent by 2028.

The likely outcome is not that the Strait of Hormuz disappears from the map, but that its grip loosens. Iraq, Kuwait and Qatar remain heavily exposed for now, and no pipeline can absorb all the crude and liquefied natural gas that would be stranded in a prolonged closure. Yet the direction is clear. Every barrel that finds an alternative route chips away at the leverage the strait provides, and the infrastructure now under construction will keep advancing even if the current conflict eases.