The ongoing conflict between the United States and Iran has led to significant disruptions in shipping through the Strait of Hormuz, a critical artery for global oil and gas supplies. With only three vessels reported to have navigated the strait in a 24-hour timeframe, the urgency for alternative routes has intensified. This shift could reshape energy logistics in the region, as stakeholders seek to mitigate risks associated with the geopolitical turmoil.
Disruption at the Strait of Hormuz
The Strait of Hormuz has long been regarded as the world’s most vital oil chokepoint, facilitating the passage of approximately 20% of global oil and liquefied natural gas. However, since the US-Israeli military operations against Iran commenced on February 28, shipping activities have been severely hampered. Recent data indicates that although a temporary opening allowed a dozen tankers to pass through, the fragile ceasefire is now in jeopardy. Iran has vowed to retaliate following the seizure of one of its vessels, complicating the prospects for peace talks.
The International Energy Agency (IEA) has characterised this disruption as the most significant in history, surpassing the oil crises of the 1970s and the recent loss of Russian pipeline gas following the Ukraine invasion. With global energy markets on edge, alternative routes are being considered to bypass this increasingly perilous strait.
Existing Bypass Options
Several established and potential alternative routes are available for oil and gas exports, each with its unique challenges and capacities.
East-West Pipeline (Saudi Arabia)
Saudi Arabia’s East-West Pipeline stretches 1,200 kilometres and is capable of transporting up to seven million barrels per day (bpd) of crude to the Red Sea port of Yanbu. Currently, effective export capacity hovers around 4.5 million bpd, contingent on tanker and jetty availability. From Yanbu, oil can be transported to Europe via the Suez Canal or directed southward to Asia through the Bab el-Mandeb strait, a route that carries its own security risks, particularly from Houthi militants based in Yemen.
Habshan-Fujairah Pipeline (UAE)
The Abu Dhabi Crude Oil Pipeline, running from Habshan to Fujairah on the Gulf of Oman, offers another alternative. Spanning 360 kilometres, this pipeline has a capacity of 1.5 to 1.8 million bpd. However, operations at Fujairah have faced challenges due to drone attacks linked to the ongoing conflict.
Kirkuk-Ceyhan Pipeline (Iraq-Turkey)
Iraq’s Kirkuk-Ceyhan pipeline provides a crucial northern export route to Turkey’s Mediterranean port of Ceyhan. This pipeline resumed operations last September following a two-and-a-half-year hiatus, with current output at 170,000 bpd and plans to increase to 250,000 bpd. The Iraqi national oil company, SOMO, is actively pursuing export contracts through Turkey, Jordan, and Syria.
Potential Future Developments
Beyond the established routes, there are several proposed pipelines that could further diversify energy transport options.
Goreh-Jask Pipeline (Iran)
Iran may soon leverage the Goreh-Jask pipeline, which has a capacity of one million bpd, to bypass the Strait of Hormuz. Although the Jask terminal is not fully operational, the IEA reports that a test loading took place in 2024, indicating progress towards utilising this route.
Iraq-Oman Pipeline
Iraq is contemplating a pipeline from Basra to Oman’s port of Duqm, which remains in the early conceptual stage. This project could involve either an overland route through neighbouring countries or a costly subsea alternative.
Iraq-Jordan Pipeline
Another proposed pipeline, intended to transport crude from Basra to Jordan’s Red Sea port of Aqaba, aims to circumvent the Strait of Hormuz. First suggested in the 1980s and given preliminary approval in 2022, this project faces obstacles due to costs, security concerns, and political issues.
Why it Matters
The geopolitical landscape surrounding the Strait of Hormuz is evolving rapidly, with the potential for significant shifts in global energy logistics. As traditional routes become increasingly perilous, the exploration of alternative pathways not only represents a strategic adaptation to current challenges but also highlights the intricate interplay between energy security and international relations in the Asia-Pacific region. The outcomes of these developments will resonate far beyond the immediate area, impacting global energy prices and supply chains in an era marked by volatility and uncertainty.
