Strait of Hormuz: Can Alternative Routes Sustain Oil and Gas Supply from the Gulf Region?
With rising tensions between Iran and the United States, the Strait of Hormuz, one of the world’s most critical maritime trade channels, has once again captured global attention. Following a brief interim agreement aimed at lasting conflict resolution, both nations have resumed hostilities within a month. This escalation has impacted international oil prices. Should navigation through the Strait of Hormuz become too risky, to what extent can Gulf oil and gas exporters use alternative maritime routes to deliver their products to global markets? Experts say that although some alternative routes exist, none currently match the strategic importance and capacity of the Strait of Hormuz.
The narrow maritime corridor between Iran and Oman, the Strait of Hormuz, serves as the main passage for the majority of the Gulf’s oil and gas exports. Its vast capacity, flexibility, and relatively low costs are its key advantages. Compared to pipelines, oil tanker ships can transport large volumes of oil at lower expenses. According to the International Energy Agency (IEA), approximately 20 million barrels of oil and petroleum products pass through the Strait daily, accounting for about one-quarter of the world’s seaborne oil trade. Of this volume, nearly 80 percent is shipped to Asian markets. Additionally, about one-fifth of the global liquefied natural gas (LNG) exports are transported via this route.
Because the Strait of Hormuz grants Iran significant influence over the global energy market, Gulf oil-producing countries have long invested in alternative infrastructure to reduce dependence on this waterway. The largest such project is Saudi Arabia’s East-West Pipeline, known as the ‘Petroline.’ Stretching approximately 1,200 kilometers, this pipeline connects the Eastern oil fields to the Yanbu export terminal on the Red Sea. It was constructed during the 1980s, amid the Iran-Iraq war, when both countries targeted oil tankers and commercial vessels in the Gulf region. In 2019, its capacity was upgraded to transport up to 7 million barrels of oil per day in emergency situations.
