Middle East allies rushing new pipelines, port to bypass Irans grip on Strait of Hormuz

Oil producers in the Persian Gulf are making plans to bypass the Strait of Hormuz with new pipelines and a new port after Iran has repeatedly attacked ships and blocked traffic.The idea is to minimize Tehran’s leverage on the waterway that once saw 20% of the world’s oil pass through it as the war stretches into its fifth month.Iran has already insisted that it will impose tolls on the strait, which could cost tens of billions of dollars.And in some cases, it is extracting millions of dollars of protection money per oil tanker.

Two such projects are already underway in the United Arab Emirates and Iraq — with Saudi Arabia eyeing its own and Dubai also seeking to establish a new port to further reduce dependence on the strait.There should be enough pipeline capacity to divert up to 45% of the pre-war Persian Gulf oil export by the end of 2027, Goldman Sachs analyst Alexandra Paulus told investors on Monday.Given that pipeline projects can move quickly in the Middle East, the bank estimates that output bypassing the strait could reach 7.3 million barrels by the end of 2028 — making 60% of the Gulf’s oil strait-proof.The UAE’s much-touted West-East Pipeline project is about 50% complete, with Crown Prince Sheikh Khaled bin Mohamed bin Zayed ordering its completion by 2027.Once completed, the 252-mile pipeline would run parallel to the Fujairah pipeline and double the country’s overland capacity to 3.6 million barrels a day.Sultan Al Jaber, the head of the Abu Dhabi National Oil Company, said the war in Iran proved Dubai was moving in the right direction with the project to free more of the world’s oil supply.“Right now, too much of the world’s energy still moves through too few choke points.

That is exactly why the ​UAE made the decision more than a decade ago to invest in infrastructure that bypasses the Strait of Hormuz,” Jaber told the Atlantic Council in May.A much more ambitious project is underway in Iraq with the 435-mile-long Basra-H...