MW The Strait of Hormuz could matter a lot less in the future - here's how
By Claudia Assis
Iran played its trump card by shutting down oil-tanker traffic. It likely won't be able to use it again.
The Strait of Hormuz, seen from Oman.
For decades, Iran has held a single geopolitical trump card in its pocket - the ability to shut down oil-tanker traffic in the Strait of Hormuz. But this strategic advantage has always come with a catch - Iran could likely only use it once.
The Strait of Hormuz long has been known as a crucial energy chokepoint, but the expensive investment needed to bypass the waterway didn't seem like it was worth the effort. Since Iran closed the strait to counter the attacks it has faced from the U.S. and Israel, the calculus has changed.
Some of the world's richest nations and their talented engineers are poring over alternatives to the Strait of Hormuz, seriously discussing land routes that could make Iran's hold on the narrow sea passage irrelevant.
As the global energy market lives through one of its worst-case scenarios - the closure of the Strait of Hormuz - the potential of diplomatic efforts in places like Islamabad and the ongoing U.S. blockade of Iranian ports are seen as short-term tactics. Experts say the current situation is likely to produce long-term solutions as well.
"This conflict is really going to change perspective, priorities and investment drivers for next 40 years for every single country in the world," said Jaime Brito, executive director of refining and oil products at OPIS. (OPIS is a unit of Dow Jones, the publisher of MarketWatch).
Two main bypasses already exist and have the capacity to get some 8.5 million barrels of oil per day out of the region while avoiding the strait. The East-West Pipeline in Saudi Arabia takes oil from fields in the east of the kingdom to the Red Sea port of Yanbu, which is on the kingdom's west coast. The United Arab Emirates also has a pipeline that goes to Fujairah in the Gulf of Oman.
A couple of other alternatives, including reviving a decommissioned pipeline that connected Saudi fields with the Mediterranean Sea, could emerge in relatively short time. And a build-up in storage to smooth out future disruptions is another way the U.S. and Israel's war with Iran would spur deep changes.
There has been a lot of discussion among experts and Gulf governments about investments in expanding existing pipelines and in new pipelines that would bypass the strait, said Kenneth B. Medlock, an energy economist at Rice University's Baker Institute for Public Policy.
"You are going to see every possible flex levered because you are talking about the livelihood" of the Gulf oil-producing countries, Medlock said.
Bahrain, Kuwait and Qatar are fully dependent on Hormuz, as is Iran, which accelerated exports ahead of the conflict.
Iraq can send some of its northern crude through a pipeline to Turkey, but most of the country's oil production comes from its southern fields, which have no inland connection to the pipeline. The pipeline also has been temporarily closed due to ongoing disputes.
In mid-March, Iraq and the semi-autonomous Kurdistan region reached an agreement to resume crude exports through the pipeline, which ends at the port of Ceyhan in Turkey.
That Baghdad and the Kurdistan Regional Government could set aside their many differences to get the oil flowing sends a huge sign, Medlock said.
Pipeline to the Mediterranean
According to conversations Medlock said he has been privy to, Gulf countries are also exploring additional connections to Egypt's Sumed pipeline and possibly reviving the Trans-Arabian Pipeline, also known as the Tapline, which has a corridor that still exists, Medlock said.
The Tapline ceased operations more than a quarter-century ago. The roughly 1,000-mile-long pipeline began operations in 1950, connecting oilfields of eastern Saudi Arabia to the port of Sidon in Lebanon, on the Mediterranean Sea.
Somewhat ironically, given the near-standstill at Hormuz throughout the conflict, the Tapline passed to the history books as "a new generation of larger and more cost-effective supertankers" reduced its economic advantages, Saudi Arabia's state-controlled oil company has said.
Pumping was discontinued, but the pipeline continued to transport smaller quantities of oil until 1990. It was decommissioned and cleared out in 2001.
It could also be possible to expand the UAE's pipeline to Fujairah and the Saudis' East-West Pipeline, including improving the port of Yanbu so bigger ships can berth there.
"All those conversations are happening," Medlock said. "There's a tremendous amount of interest right now in diversification" not just in oil and gas but also in bulk-goods routes, he said. Rail expansions also might happen as disrupting Hormuz went from "a tail event to something that is real."
Some of the projects could take anywhere from three to five years, said Medlock. Others, particularly building up loops and pipeline expansions, could be faster, he said.
As for the old political rivalries that stood in the way of Hormuz alternatives in the past, "given the severity of what's happening right now and the fact that the pain is felt by everybody in the region, there will be a lot of willingness to negotiate," Medlock said. "There's a price for everything, and in this case the pain point is so high that we passed through that threshold."
The pipelines will take time to build and they may not move as much combined crude as massive oil tankers are able to carry, but a more robust pipeline system could take a daily amount of oil that comes close to approximating what typically has been exported through the Strait of Hormuz. To make up the difference, oil importers could find suppliers outside of the Gulf. For countries like Saudi Arabia relying on the pipelines, the oil-price increases associated with any future disruption of the flow of oil in the strait would make up for the volume lost, Medlock said.
Then there's safety. Pipelines, ports and other on-land infrastructure are sitting ducks in a military conflict. And as long as they remain within range of Iranian missiles, they won't be entirely safe. Both Saudi Arabia's East-West and UAE's Fujairah pipelines were hit during the conflict, including an attack last week at a pumping station on the East-West pipeline that Saudi Arabia said led to a loss of about 700,000 barrels of crude a day in output.
While not downplaying the risks, Rice University's Medlock pointed out that pipelines can be fixed relatively quickly.
Today, the capacity of the pipelines that bypass the strait are reaching their limits or are already maxed out, said Al Salazar, a director at Enverus Intelligence Research. "Ultimately the most painful solution is demand destruction," he said. "That's basically rewinding 10 years of demand growth."
That demand-destruction scenario is already now playing out in several Asian countries, which have moved to curb crude consumption by instituting four-day workweeks, early office closures and other power-saving measures. A European airport-industry group has warned of jet-fuel shortages for the continent.
About a fifth of global crude and crude products passes through the Strait of Hormuz in times of peace. Some 80% of Middle East crude and crude products are headed to Asia in normal times, with the rest heading to Europe.
After the conflict ends, international and state-owned oil companies as well as private companies are likely to invest in storage facilities across Asia's more vulnerable countries as they seek energy security, OPIS's Brito said.
"What's failing right now is storage," Brito said. By the second week of the conflict, Asian countries had already placed fuel restrictions due to their lack of storage, he said. More places to sock away fuels "could be a game-changer for Asian countries."
-Claudia Assis
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April 15, 2026 08:30 ET (12:30 GMT)
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