Bypassing Hormuz! Gulf countries are "willing to spend heavily": considering building new oil pipelines

Ask AI · Is the biggest challenge for Gulf countries building new pipelines cost or geopolitics?

Cailian News, April 2 (Editor: Xiaoxiang) Industry insiders say Iran’s threat to exercise indefinite control over the Strait of Hormuz is prompting many Gulf countries to reassess their costly oil pipeline plans, in order to bypass this critical maritime chokepoint and ensure they can continue exporting oil and natural gas.

Officials and industry executives say building new pipelines may have become the only way to reduce Gulf countries’ vulnerability to the Strait of Hormuz’s ongoing disruptions—despite the high costs of such projects, complex political factors, and the fact that they can take years to complete…

The current conflict underscores the strategic value of Saudi Arabia’s 1,200-kilometer “East-West Pipeline.” The pipeline was built in the 1980s, when there were concerns that the Iran-Iraq war might block the strait. Now, it has become a key lifeline for Saudi oil exports—currently transporting 7 million barrels of oil per day from the Red Sea port of Yanbu to the country’s ports, completely bypassing the Strait of Hormuz.

Last month, Amin Nasser, CEO of Saudi’s state-owned oil giant Saudi Aramco, said the pipeline is “the main route we are currently using.”

“Looking back, Saudi’s East-West Pipeline is just a stroke of genius,” a senior energy executive from a Gulf country said.

Saudi’s success has prompted Middle East oil-producing countries to spare no expense

Saudi’s success has undoubtedly made Middle East oil producers envious. In fact, pipeline plans in the region had previously stalled multiple times due to high costs and complexity. But Maisoon Kafafy, a senior advisor for Middle East projects at the Atlantic Council, said attitudes in the Gulf region have now changed.

“I feel we’re shifting from assumptions to operational reality,” she said, “everyone is looking at the same map and reaching the same conclusion.”

Kafafy said the most resilient choice is “not a single alternative pipeline, but a network—a corridor grid,” although she added that this would also be the most difficult to implement.

In the long term, any new pipeline could become part of a larger trade route, allowing a broader range of goods to flow through these routes beyond oil and natural gas.

A Gulf official said that one option is to restart the India–Middle East–Europe Economic Corridor plan (IMEC), previously led by the United States. The corridor starts in India, passes through the Gulf region, and then heads to Europe, although an initial part of the project includes a pipeline to the Israeli port of Haifa, which is politically more sensitive.

Yossi Abu, CEO of Israeli energy company NewMed, said he is confident the pipeline to the Mediterranean will be built, whether its endpoints are in Israeli or Egyptian ports. “People need to take control of their destiny with allies,” he said. “You need land-based oil pipelines and rail interconnections across the region so that others don’t control the chokepoints that could strangle us.”

Christopher Bush, CEO of Lebanon’s private company Cat Group—once one of the main builders of the Saudi East-West Pipeline—said there was already strong interest in new projects even before the war began. “We’ve received consultations about various different pipelines,” he said. “Multiple different presentation materials are on my desk.”

But he added that the obstacles remain huge. Bush estimates that replicating the East-West Pipeline today would cost at least $5 billion. The project involves blasting through the hard basalt of the Hijaz Mountains along Saudi Arabia’s Red Sea coast. And proposals for more complex multinational routes passing through Iraq, Jordan, Syria, or Turkey would cost between $15 billion and $20 billion.

What feasible options exist in the short term?

Industry insiders said the most feasible short-term solutions may be to expand Saudi’s East-West Pipeline and the existing route from Abu Dhabi to the port of Fujairah (Fujairah). This will increase capacity without increasing the complexity of cross-border infrastructure.

( Oil pipeline projects in the Middle East currently operating and planned )

Saudi Arabia could also develop additional export terminals along its Red Sea coast, including a deepwater port under construction for the Neom project. “I’m sure they’re seeing it as a possibility,” Bush said. “Right now there are many smart people paying attention to all of this. It’s a big issue.”

A senior energy executive said Abu Dhabi “has a B plan for a second pipeline to Fujairah.” But they added that it is unlikely any decisions will be made until the Strait of Hormuz’s long-term position is clarified.

In addition, Iraq could become a key link connecting Eurasian and African oil pipeline transportation. On Tuesday, Iraqi Anbar Province MP Adnan al-Kubaisi announced that, given the strategic importance of the Haditha-Aqaba pipeline project to diversifying oil export channels, Iraq’s parliament may soon take action to urge the government to restart the project.

The project had previously been approved, but it faced many hurdles. However, given the economic benefits it brings, there is now pressure to restart it. The pipeline runs from Basra in southern Iraq to Haditha in western Anbar Province, and then extends to Aqaba port in Jordan, providing a direct route to the Red Sea and European markets.

It is also reported that Iraq is currently close to restoring a previously idle land-based oil pipeline to Turkey. Iraq’s State Company for Oil Engineering (SCOP) has begun pressure testing the final section of the Baiji-Fishkhabour pipeline. This line connects to the Kirkuk–Ceyhan pipeline, ending at the Turkish port of Ceyhan on the Mediterranean.

Of course, many pipeline projects still face real practical difficulties. Security risks include “large amounts” of unexploded ordnance within Iraq, as well as the continued presence of “Islamic State” (ISIS) or other armed groups. Bush warned that pipelines extending south to Oman’s ports would also face challenges in crossing deserts and hard rocky mountain ranges.

Political challenges also include who will operate the pipelines and control the flow. Bush added that a pipeline network would require Gulf countries to “abandon the policy of operating separately and unite. Previously, people always thought chartering ships, loading, and shipping were cheaper and safer.”

(Cailian News, Xiaoxiang)