Dario Sabaghi
The New Arab / July 27, 2026
As the war grinds on, a regional multibillion-dollar push to build alternative pipelines, export routes, and trade corridors is gathering pace.
Countries across the Middle East are rushing to develop alternative pipelines and trade routes to bypass the Strait of Hormuz, as uncertainty over the waterway’s future exposes the risks of relying on a single energy chokepoint.
Over the past two weeks, the US has been conducting fresh attacks against Iran, despite the two countries signing a memorandum of understanding in June to reopen the strait and negotiate for a final peace deal.
Iran has retaliated against the US by targeting its military bases and assets in the region, as well as attacking oil tankers and vessels that attempted to transit the strait without coordination with Iranian authorities.
Iran’s Revolutionary Guards navy also announced the closure of the strait until further notice, while the US reimposed a naval blockade on Iranian ports. Iran is seeking to control the strait, while the US aims to keep the chokepoint out of Tehran’s control.
The renewed clashes between Saudi Arabia and Yemen’s Houthis, and the fear of a potential blockade of the Bab al-Mandab Strait shipping route, have further shocked the global markets, with Brent crude oil price hitting $100 a barrel last week for the first time since May.
While over the weekend the US paused attacks on Iran to potentially create more room for diplomacy, the monthslong escalation has prompted Saudi Arabia, the United Arab Emirates (UAE), and other oil-and-gas exporting countries in the region to spend billions of dollars to accelerate their plans to bypass the Strait of Hormuz, a move that aims to redraw the regional energy map.
But the strait’s dominance as the world’s most critical oil chokepoint won’t be easy to wipe off the map.
Alternative routes, familiar limits
The Strait of Hormuz is one of the most vital chokepoints for global trade, with about one-fifth of global oil and liquefied natural gas (LNG) passing through the waterway. Before the war, about 20 million barrels of oil passed through the strait each day, but its effective closure reduced commercial ship transits by over 90%. The International Energy Agency estimated that Middle East producers lost over 1.3 billion barrels since the war began.
“The Strait of Hormuz remains the Gulf’s most efficient export route because the overwhelming majority of oil and LNG infrastructure was built around it,” Neil Quilliam, associate fellow at Chatham House and partner at Azure Strategy Consulting, told The New Arab.
He explained that while alternative routes could help diversify risk, they cannot match Hormuz’s capacity or flexibility. “They reduce vulnerability rather than eliminate it, particularly for LNG exports, where Qatar has no viable alternative route.”
Such alternatives are designed to reroute oil to the Mediterranean Sea or the Red Sea, effectively bypassing the Persian Gulf.
Saudi Arabia, the world’s top oil exporter, is reportedly considering expanding the East-West Pipeline. Also known as Petroline, the 746-mile-long pipeline runs from the Abqaiq oil field to Yanbu, at the Red Sea.
While it has the capacity to transport up to seven million barrels per day (bpd), the Kingdom is now planning to expand its capacity by up to 2 million bpd, according to Reuters.
The UAE in May announced it was fast-tracking the construction of a new oil pipeline to Fujairah port that could double export capacity and is expected to be operational by 2027.
Iraq is negotiating terms with Turkey for its existing 600-mile-long pipeline, which runs from Kirkuk to Ceyhan on the Turkish coast of the Mediterranean. The visit of Iraq’s new prime minister Ali al-Zaidi to the White House has also brought Iraq about $60 billion-worth of contracts with American companies in several key sectors, including energy.
With Syria, Baghdad is planning to revive the defunct Kirkuk–Baniyas pipeline, and with Jordan, it has agreed to accelerate the Basra-Aqaba pipeline project.
The Sharjah-Oman corridor, a trade and logistics route launched in May that connects the Emirati ports in Sharjah with major Omani ports, could also be potentially used to bypass Hormuz’s waterways.
Egypt and Saudi Arabia are building a new logistics corridor that uses Mediterranean and Red Sea ports, creating another alternative route to the Strait of Hormuz.
The US, meanwhile, is exploring other initiatives. US Ambassador to Turkey and special envoy for Syria and Iraq, Tom Barrack, recently announced that Washington is working on alternative routes to Hormuz in coordination with Syria, Jordan, Turkey, Lebanon, and Egypt.
“These routes improve resilience but do not eliminate risk,” Carole Nakhle, energy economist and founder & CEO of Crystol Energy, told The New Arab, adding that they are valuable alternatives, but they are “complements, not substitutes, for Hormuz”.
While alternative routes could reduce reliance on the Strait of Hormuz and diversify risk, they lack the capacity to replace its oil flows, offer no LNG solution, and remain vulnerable to security risks.
Quilliam further explained that “even if oil continues to flow through alternative pipelines, markets would still react to reduced spare capacity, higher shipping costs and greater geopolitical risk. Gas markets would be even more exposed because Qatar’s LNG exports remain tied to Hormuz”.
The geopolitics of new trade corridors
The race to bypass Hormuz is also expected to have political implications that could alter relations between Gulf countries.
Andreas Krieg, associate professor in Security Studies at King’s College London, told The New Arab that such projects are set to produce both cooperation and competition, but “competition will be the stronger force”.
“The Gulf states understand that they need collective resilience, which means interoperable customs systems, shared rail corridors, overland routes and access to ports outside the Strait,” he said. “But every state also wants to become the indispensable gateway for the region.”
Saudi Arabia and Oman are positioning themselves to reshape Gulf trade routes, challenging the UAE’s long-standing logistics importance, Krieg explained. Riyadh’s east-west connectivity plans and Oman’s ports at Duqm and Salalah offer alternatives to Hormuz, boosting their strategic leverage while risking reducing the UAE’s relative influence.
Meanwhile, Qatar would gain resilience, but it would also become more dependent on Saudi Arabia and Oman for overland access. The shift is unlikely to fracture Gulf cooperation, but it may intensify competition over infrastructure, customs, investment, freight flows and geopolitical weight, turning logistics corridors into another arena of Saudi-UAE rivalry, while strengthening Saudi-Omani alignment.
Iraq, Kuwait, Qatar, and Iran would be among the most exposed to the closure of Hormuz because they rely heavily on it for exports, Nakhle added, while “outside the region, producers such as the United States, Brazil, Canada, Norway and Guyana could become relatively more attractive suppliers as buyers seek to diversify risk”.
While alternative routes may reduce Iran’s leverage over the strait, which it uses against the US, they are unlikely to change its strategic importance.
“Iran can still threaten a large share of global energy exports,” Quilliam said. “As long as around a fifth of the world’s oil and a significant proportion of LNG passes through the Strait, it will remain one of the world’s most consequential maritime chokepoints, and critical to Gulf export revenues.”
Tensions over the strait, coupled with the potential disruption of Bab al-Mandab, may create a greater impact on the markets, as cargoes would be forced to use longer and more costly routes and face logistical challenges.
But even if production remained intact, Nakhle explained that “higher freight costs, insurance premiums and delivery times could tighten markets and push prices higher”.
Marine insurance premiums have risen sharply, with Strait of Hormuz war risk premiums increasing to 7.5–10% of hull value due to escalating attacks, according to S&P Global. Red Sea premiums have also increased amid Houthi threats, although to a lesser extent.
Gulf states’ push to build alternative export routes is not intended to render the Strait of Hormuz irrelevant, but to reduce Iran’s leverage over it, Krieg argues.
“If Iran can close the Strait and bring the entire Gulf economy to a halt, it has extraordinary leverage. If closing the Strait causes serious damage but trade continues through Saudi Arabia, Oman and Fujairah, that leverage becomes more manageable,” he said.
“Over time, alternative routes could shift the balance from Iranian coercive dominance towards a more distributed Gulf system in which no single chokepoint can paralyse the region.”
Dario Sabaghi is a freelance journalist interested in human rights
