Middle East oil producers expand pipeline projects amid Hormuz tensions

Oil exporters in the Middle East are accelerating plans for additional pipelines to bypass the Strait of Hormuz, where Iranian attacks on tankers have disrupted seaborne shipments. The United States is backing Iraq’s reconstruction of a crude line that would run from Kirkuk through Syria to the Mediterranean, and U.S. firms are expected to participate in its construction. The United Arab Emirates aims to double its non-Hormuz export capacity by completing a second line to the Port of Fujairah, while Saudi Arabia is reportedly studying an expansion of its Red Sea corridor by up to 2 million barrels per day.

Goldman Sachs analysts note that seven pipelines in the region are either under construction or in planning stages, potentially raising total capacity to more than 14 million barrels per day by the end of 2028—about 60 % of the Gulf states’ pre-war export volume. Jennifer Li, a geopolitical analyst at Rystad Energy, says the projects serve as a hedge against disruptions rather than a full substitute for the strait. She points to a recent Iranian strike on a Saudi pumping station that cut throughput by 700,000 barrels per day as evidence of the vulnerability of pipeline infrastructure.

Bob McNally, founder of Rapidan Energy, told CNBC that the broader risk lies in Iran’s ability to target loading facilities, pumping stations, terminals and storage units along the pipelines. Meanwhile, a senior Houthi political official indicated the group is prepared to close the Bab el-Mandeb Strait in coordination with Iran if U.S. forces strike Iranian power infrastructure, a move that could affect the flow of oil diverted through Saudi Arabia’s Red Sea export terminal at Yanbu. Michelle Wiese Bockmann, a senior maritime intelligence analyst at Windward, emphasized Yanbu’s significance to both Saudi Arabia and the global oil market.