Is The Gulf Rebuilding Its Oil Network to Bypass the Strait of Hormuz?

• Strait of Hormuz remains at the center of the global oil supply and the US-Iran war as Gulf nations accelerate pipeline and port projects that could reduce dependence on the critical shipping route by 2028
• Goldman Sachs estimates new Gulf infrastructure could allow nearly 60% of oil exports to bypass the Strait of Hormuz by 2028, though millions of barrels per day would still rely on the waterway
• Rising US-Iran tensions and reports of potential new US strikes on Iran continue to fuel concerns over oil market volatility, shipping disruptions, and energy security

The Strait of Hormuz has been a trending topic for the past few months, given that it’s a central theme of the ongoing US-Iran conflict. This war has been hampering global oil routes and oil supplies, giving world economies unforgettable jitters. In the given time, the Strait of Hormuz has been blocked countless times, leading the global markets to figure out an alternative. Being the only leading passageway for ships to enter the leading trade routes, the strait is now a leading topic of contention among the economies. However, a new idea is now resurfacing to bypass this blockade, primarily in the form of Gulf countries trying to build their own oil network instead of relying on the SoH completely. Is this a reality that we may witness some time soon?

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Strait Of Hormuz Might Get A New Competitor 

The world economies are now tired of witnessing the frequent blockades of the Strait of Hormuz due to the Iran-US war. These dynamics have been severely impacting the leading oil supply networks, disrupting global shipping routes. In this wake, the Gulf countries have decided to figure out an alternative in order to protect their trading routes and keep them intact. Per a reference made in the Goldman Sachs report, the Gulf countries might be working on expanding their own global oil routes and network to restrict their reliance on the SoH. 

Goldman Sachs analysis reports state how it has tracked seven pipelines and export infrastructure that are currently under production, planned, or considered feasible across the Gulf.  If this further gains momentum, Goldman Sachs shared how it sees nearly 60% of global oil supply bypassing the Strait of Hormuz by 2028. 

“The Gulf is racing to make its oil “strait-proof,” with pipelines that could bypass 60% of Hormuz dependence by 2028. Iraq’s $1.5 billion Basra-Haditha line would carry 2.5 million barrels toward Jordan, Syria, and Turkey, while Saudi Arabia eyes expanding its Red Sea pipeline to 9 million barrels. The UAE is also planning a new Arabian Sea port to rival Jebel Ali, importing goods without touching the strait. The catch: 7-9 million barrels daily will still depend on Hormuz, and the Red Sea alternative runs through Houthi missile range. The infrastructure is the war’s most permanent verdict.”

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Escalation Continues to Rise

Per the recent post by the Kobiessi Letter, President Trump is once again planning strikes on Iran if the country fails to renegotiate with the US. The ongoing US-Iran war may escalate once again, as Trump has reportedly called for a Situation Room meeting for discussions related to upcoming strikes on Iran. 

The US’s offense plan per the KL report includes the country striking the wider areas near the Strait of Hormuz. Moreover, the meeting focused on “launching devastating strikes on the US on strategic targets in Iran.”

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