Gulf countries are considering the construction of new pipelines to bypass the Strait of Hormuz
Gulf states are considering the construction of new pipelines to reduce their dependence on the Strait of Hormuz amid fears it could be blocked, reports the Financial Times.
Representatives from governments and the energy sector note that such projects may be the only way to reduce risks to oil and gas exports, although they will require significant investment and a long time to implement.
The situation has drawn renewed attention to the 1,200-kilometre East-West oil pipeline in Saudi Arabia. It was built in the 1980s following fears of a possible closure of the strait during the Iran-Iraq War. Currently, this route allows up to 7 million barrels of oil per day to be transported to the port of Yanbu on the Red Sea, bypassing the Strait of Hormuz.
Saudi Aramco CEO Amin Nasser stated that this pipeline is currently the main export route.
Saudi Arabia is considering increasing the share of oil exports via pipelines rather than transporting it through waters controlled by Iran. Options include expanding the capacity of the East-West pipeline or creating new routes.
Previously, such projects were not implemented due to high costs and complexity. However, according to Maisoun Kafafi, a programme adviser for the Middle East at the Atlantic Council, there is a shift in approach taking place in the region.
“I sense a shift from hypothetical discussions to practical implementation. Everyone is looking at the same map and drawing the same conclusions,” she said.
Among the possible solutions being considered is the creation of a network of pipelines rather than individual routes. At the same time, this option is the most difficult to implement.
Separately, the possibility of reviving the IMEC initiative is being discussed, which envisages the creation of a transport corridor from India through the Gulf states to Europe. A pipeline to the Israeli port of Haifa was previously part of this project.
Yossi Abu, CEO of the Israeli company NewMed Energy, stated that the construction of pipelines to the Mediterranean Sea is a likely option, regardless of whether they pass through Israel or Egypt.
Interest in new projects existed even before the conflict began, noted Christopher Bush, CEO of Cat Group. At the same time, he emphasised that the cost of such initiatives remains high. He estimates that building an East-West pipeline could cost at least $5 billion, whilst more complex routes through several countries could run to $15–20 billion.
Among the risks, he cited security issues, in particular the presence of unexploded ordnance in Iraq and the activities of militant groups. Natural conditions, particularly deserts and mountainous areas, also pose challenges.
In the short term, the expansion of existing routes is being considered, notably the East-West route in Saudi Arabia and the pipeline from Abu Dhabi to Fujairah. The possibility of developing new export terminals on the Red Sea coast is also being explored.
According to industry representatives, final decisions will depend on the future situation regarding the Strait of Hormuz.
