Ambitious proposals, such as a canal linking the Gulf to the Arabian Sea, remain largely theoretical.
Dubai: Disruptions to shipping through the Strait of Hormuz are highlighting a structural constraint in global energy markets: alternatives exist, but were they ever designed to fully replace this vital corridor?
The Strait of Hormuz is not just another transit route — it is the only maritime exit from the Arabian Gulf to the open seas. The United Nations Conference on Trade and Development estimates that roughly 20%–25% of global seaborne oil and about 20% of liquefied natural gas pass through it each day. This concentration of flows explains why even brief disruptions can trigger sharp global price volatility.
The International Energy Agency has described the current outage as one of the largest oil supply disruptions in history. Its Executive Director, Fatih Birol, recently called it the “biggest energy crisis in history,” according to Reuters. Crude prices also surged as markets began pricing in the risk of prolonged supply disruption from the Gulf.
Saudi Arabia: The only large-scale diversion
Saudi Arabia’s East–West pipeline is the only system in the region built at sufficient scale to meaningfully reroute oil exports.
The 1,200-km pipeline connects the kingdom’s eastern oilfields to the Red Sea port of Yanbu. It can carry up to 7 million barrels per day (bpd), although effective export capacity is closer to 4.5 million bpd due to terminal constraints, according to Reuters.
This route shifts exports away from the Gulf entirely. Tankers departing from Yanbu can head toward Europe through the Suez Canal or toward Asian markets via the Bab el-Mandeb. However, this creates a second chokepoint. Security risks in the Red Sea corridor, including tanker attacks linked to regional conflicts, mean the diversion reduces exposure to the Strait of Hormuz but does not eliminate it.
Bloomberg reported that Saudi Arabia has increased utilisation of the pipeline since the disruption began, underlining its role as the system’s primary shock absorber.
UAE pipeline offers a geographic advantage
United Arab Emirates bypasses the Strait of Hormuz geographically rather than rerouting exports across the peninsula. The Habshan–Fujairah pipeline, operated by ADNOC, carries crude from inland fields to Fujairah on the Gulf of Oman. With a capacity of about 1.5–1.8 million barrels per day (bpd), it allows exports to avoid Hormuz entirely, according to Reuters.
Fujairah has also developed into a major global storage and bunkering hub, strengthening its role in maintaining supply continuity. However, capacity remains limited relative to overall Gulf export volumes, and infrastructure at the port has recently faced disruption from drone attacks linked to the escalating conflict, Reuters reported.
The UAE model shows how geography can reduce dependence on chokepoints, but it does not remove systemic vulnerability.
Iraq: Diversification through smaller alternative routes
Iraq faces a different challenge — limited pipeline redundancy. The Kirkuk–Ceyhan pipeline to Turkey provides a northern export route to the Mediterranean via the Turkish port of Ceyhan. Current flows stand at about 170,000 bpd, with plans to increase capacity to 250,000 bpd. Even at full utilisation, this would represent only a small fraction of Iraq’s total export capacity.
Faced with disruptions in Gulf shipping, Iraq has also turned to overland exports through Syria, according to Reuters. However, this shift increases transport costs and operational complexity, highlighting how alternative routes often come with significant economic trade-offs.
Rather than relying on a single large-scale bypass, Iraq depends on multiple smaller export channels, none of which materially reduce its overall exposure to the Strait of Hormuz.
Iran: Partial bypass without full functionality
Iran has attempted to create its own alternative to the Strait of Hormuz through the Goreh–Jask pipeline, designed to carry around 1 million barrels per day (bpd) of crude to export terminals at Jask on the Gulf of Oman. This route would, in theory, allow Iranian exports to bypass Hormuz entirely.
However, the system is not yet fully functional. The International Energy Agency says the terminal remains incomplete, and while a test cargo was loaded from Jask in late 2024, no sustained export flows have followed. Reuters also noted that construction of the terminal is still unfinished, limiting its practical value as a large-scale alternative route.
That means most of Iran’s exports still rely heavily on Kharg Island, the country’s main export hub inside the Gulf. The Goreh–Jask project improves strategic flexibility, but for now it offers only a partial bypass rather than a fully operational replacement for Hormuz.
The International Energy Agency said the Jask terminal is not yet fully complete, and according to Reuters, this limits its ability to offset disruptions despite a test shipment in 2024.
That leaves Iran in a transitional position — with infrastructure in place, but not yet capable of fully reducing its reliance on the Strait of Hormuz.
Alternatives constrained by cost, politics, and time
Several proposed routes aim to reduce long-term dependence on Hormuz, but none are capable of addressing immediate supply risks.
Iraq has revived plans for a pipeline linking Basra to Oman’s port of Duqm, which would provide direct access to the Indian Ocean. Reuters reported that the project remains at an early conceptual stage, with route options still under study.
A separate Iraq–Jordan pipeline to Aqaba has been under discussion for decades. Despite receiving in-principle approval, the project remains stalled due to financing gaps, security concerns, and political coordination challenges.
More ambitious proposals, including a canal linking the Gulf to the Arabian Sea, remain largely theoretical. Engineering constraints — particularly mountainous terrain — and costs running into hundreds of billions of dollars make such projects long-term possibilities at best.
Constraint is structural, not temporary
The core issue is not the absence of alternatives, but their scale. Around 20 million barrels per day (bpd) of crude and refined products typically flow through the Strait of Hormuz — far exceeding the combined capacity of existing bypass pipelines, according to data from the International Energy Agency (IEA).
The International Energy Agency has also said there are no alternative routes capable of handling the large volumes of liquefied natural gas (LNG) that transit the Strait of Hormuz. This imbalance helps explain the sharp market reaction. Bloomberg reported that oil price volatility has increased as traders price in sustained supply tightness and elevated geopolitical risk.
Why Hormuz remains indispensable
The region’s infrastructure allows for partial rerouting, but it does not provide true system-level redundancy.
Saudi Arabia can divert significant export volumes through its East–West pipeline. The United Arab Emirates can bypass the strait for part of its exports through Fujairah. Iraq and Iran can redirect limited flows through secondary routes. But none of these options can replace the full throughput of Hormuz.
That leaves global energy markets heavily exposed to a single chokepoint. As Reuters’ route-by-route assessment and IEA data show, any prolonged disruption is likely to tighten supply, raise transport risks, and sustain price pressure far beyond the Gulf region.
