Alternatives to Strait of Hormuz? Gulf nations are mulling Plan B

Gulf countries are reportedly reconsidering costly pipeline projects to bypass the Strait of Hormuz amid concerns over prolonged Iranian control of the strategic waterway. These pipelines aim to ensure uninterrupted oil and gas exports despite high costs, political challenges, and long development timelines.

According to a report in Financial Times, Saudi Arabia’s 1,200 km East-West pipeline, built in the 1980s during the Iran-Iraq tanker conflict, remained vital. It carries 7 million barrels of oil daily to the Red Sea port of Yanbu, completely avoiding the Strait of Hormuz. Amin Nasser, CEO of Saudi Aramco, confirmed the pipeline as the kingdom's main export route.

The kingdom is exploring options to increase pipeline exports rather than relying on Iranian-controlled waters. This includes potential expansion of the East-West pipeline or new routes, the report stated. 

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Long-term pipeline projects may also serve as trade corridors for goods beyond oil and gas. One proposal involves reviving the US-led IMEC corridor from India through the Gulf to Europe, though political sensitivities remain, especially concerning routes to Israel’s port of Haifa, it said. Yossi Abu, CEO of Israeli firm NewMed Energy, expressed confidence in pipelines reaching the Mediterranean via Israeli or Egyptian ports, stressing the importance of regional control over energy infrastructure.

Christopher Bush, CEO of Lebanon’s Cat Group, which helped build Saudi’s East-West pipeline, confirmed strong interest in new projects predating current conflicts. However, he highlighted significant obstacles, including costs estimated at $5 billion for a similar East-West pipeline and $15-20 billion for multi-country routes involving Iraq, Jordan, Syria, or Turkey. Even so, there are security concerns including militant threats. 

Near-term solutions may involve expanding the East-West pipeline and Abu Dhabi’s existing pipeline to Fujairah, increasing capacity without new cross-border complexities, the report stated. Saudi Arabia may also develop additional export terminals on its Red Sea coast, including the Neom project’s deepwater port.

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The UK is leading talks among 35 countries to form a coalition aimed at reopening the Strait of Hormuz. Experts say Gulf states will take time to assess the situation but agree a new approach is needed given the energy crisis. A return to the pre-conflict status quo is not expected.