Middle East oil producers accelerate pipeline projects to reduce Hormuz dependence

Oil exporters in the Persian Gulf are expanding pipeline capacity to move crude away from the Strait of Hormuz, which has been a focal point of Iranian tension. Government officials, oil firms and analysts say at least seven major projects are under way or being planned, with the goal of diverting up to 7.3 million barrels per day by 2028.

The Saudi East-West pipeline, built in the 1980s, already carries oil from Abqaiq to the Red Sea port of Yanbu, while the United Arab Emirates is boosting shipments to Fujairah on the Gulf of Oman. A $3 billion, 300-kilometre pipeline under construction in the UAE is expected to add more than 1.2 million barrels per day to Fujairah’s throughput, with completion now projected for mid-2027.

In Iraq, officials are pursuing routes that would take Basra’s output to Turkey’s Mediterranean port of Ceyhan and to Syria’s Baniyas, potentially moving up to 2 million barrels per day. Discussions are also ongoing with Jordan on a pipeline to Aqaba for Red Sea export.

Analysts at Goldman Sachs estimate the combined projects could handle an additional 3.8 million barrels per day by the end of next year, rising to 7.3 million barrels per day by 2028, representing roughly 60 % of pre-war Gulf exports.

Security concerns persist. Yemen’s Iran-backed Houthi rebels have attacked Saudi tankers in the Red Sea and previously struck the Saudi East-West pipeline with a drone. The Red Sea route also remains vulnerable to attacks at the Bab el-Mandeb Strait, and the Suez Canal cannot accommodate the largest oil tankers, limiting its capacity as an alternative.

The shift does not address liquefied natural gas shipments, about one-fifth of which previously transited the strait, underscoring the continued strategic importance of the Hormuz corridor.