Iran continues to control the Strait of Hormuz, limiting oil transit and prompting global markets to seek alternative routes. Pipeline expansions in Saudi Arabia, the UAE, Iraq, and proposed projects in Turkey are expected to reduce reliance on the strait over the next few years. Analysts project that up to 75% of Gulf oil exports could bypass the strait by 2028 in an accelerated scenario.
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Iran's control of the Strait of Hormuz persists, though international petroleum markets may reduce reliance on this disputed passage within several years. After over a week of continuous airstrikes, the military has not been able to establish a safe shipping passage through the strait that avoids the government-sanctioned route, with commercial traffic remaining deterred by ongoing drone and missile activity.
Seven vessels passed through Iran's channel on Friday, whereas the U.S.-backed passage recorded neither crossings nor any activity from vessels operating outside standard maritime regulations. The guarantees provided by Washington have not proven adequate. According to a marine radio transmission, forces were positioned to uphold navigational rights and protect legitimate maritime trade under established international standards. The southern route of the strait remains open, though a recording examined by the Wall Street Journal captured one seafarer responding with a profane dismissal.
Following an assault attributed to Iran that resulted in the death of a seafarer, authorities have prohibited crew members from the country from taking part in passages through the waterway for an indefinite period. The head of the Japan Foreign Trade Council stated that commercial vessels are avoiding the strait during the ongoing hostilities.
Prior to the conflict initiated by Washington and Tel Aviv against Tehran in late February, approximately 20 million barrels of petroleum passed daily through the Hormuz waterway. Iran's action to close it triggered a substantial disruption to global oil supplies, though alternative supply routes were quickly established to mitigate the impact. A greater number of vessels disabled their tracking systems to traverse the waterway without detection, while existing petroleum reserves experienced substantial depletion.
Overland transportation networks, including the East-West pipeline in Saudi Arabia and the Habshan-Fujairah pipeline in the UAE, were used to redirect supplies. Railway transport routes have also been utilized by the two nations. Iraqi crude oil has additionally been transported by numerous lorries to Mediterranean harbour facilities in Syria. Syria's share of regional shipping volumes has grown to exceed 25%, up from zero several months earlier.
Kuwait is pursuing arrangements with Saudi Arabia and the United Arab Emirates to transport its petroleum through expanded neighbouring pipeline infrastructure as an alternative route from the Gulf. Additional capacity is expected to become available. Kpler reports that the UAE's new West-East pipeline has reached 50% completion and may begin operations in early 2024. This additional capacity supplements expansion of the Habshan-Fujairah pipeline, with parallel increases being made to Saudi Arabia's East-West pipeline.
A business group including Chevron is evaluating the reconstruction of the pipeline linking Kirkuk in northern Iraq to Baniyas, a Syrian Mediterranean port, following damage sustained during the conflict in Iraq twenty years ago. Turkey has put forward a proposal to extend the Kirkuk-Ceyhan pipeline southward to Basra, Iraq's Gulf port, which would establish an additional route to Mediterranean markets and reduce reliance on the Strait of Hormuz.
A report from Goldman Sachs projected that by late next year, new pipeline infrastructure in the Middle East will probably shield more than 45% of Gulf oil shipments that existed before the conflict. Projections indicate the proportion may exceed 60% before 2029, with an intensified pathway potentially reaching 75%. According to Goldman's analysis, regional pipeline construction projects typically require a median of 2.5 years to complete, though this timeframe often shortens when responding to interruptions in supply.