Bypassing Hormuz: Can the seven major Middle East crude oil pipelines reshape the Gulf energy export pattern?
Shipping risks in the Strait of Hormuz have resurfaced, and the impact has further spread to the Bab el-Mandeb Strait, making Gulf oil-producing countries deeply aware of the fragility of maritime oil transportation channels. Potential safety hazards in waterways have prompted countries to accelerate the layout of alternative transportation routes, and large-scale energy infrastructure in the region has ushered in a construction boom. Currently, there are two core onshore pipelines shouldering the important task of bypassing. The Saudi East-West oil pipeline is a key alternative route, through which crude oil is transported from Abqaiq to Yanbu on the Red Sea coast. The Abu Dhabi Crude Oil Pipeline (Habshan-Fujairah Pipeline) is continuously increasing its crude oil shipments to the Port of Fujairah on the Gulf of Oman.
Shipping risks in the Strait of Hormuz have resurfaced, and the impact has further spread to the Bab el-Mandeb Strait, making Gulf oil-producing countries deeply aware of the fragility of maritime oil transportation channels. Potential safety hazards in waterways have prompted countries to accelerate the layout of alternative transportation routes, and large-scale energy infrastructure in the region has ushered in a construction boom. Currently, there are two core onshore pipelines shouldering the important task of bypassing. The Saudi East-West oil pipeline is a key alternative route, through which crude oil is transported from Abqaiq to Yanbu on the Red Sea coast. The Abu Dhabi Crude Oil Pipeline (Habshan-Fujairah Pipeline) is continuously increasing its crude oil shipments to the Port of Fujairah on the Gulf of Oman. Data from the U.S. Energy Information Administration (EIA) shows that before the war broke out, the two pipelines had a combined surplus capacity of 3.5 million to 5.5 million barrels per day. Today, both pipelines are operating near capacity. According to reports, at least seven large pipeline projects are currently under construction, planning or discussion. 1. United Arab Emirates West–East Pipeline: It is still in the construction stage, and the line is parallel to the existing Abu Dhabi crude oil pipeline. The UAE continues to promote the construction of crude oil export infrastructure and aims to double Fujairah's crude oil export capacity; 2. Saudi Arabia’s East-West Oil Pipeline Expansion and Yanbu Terminal Pipeline Network Upgrade Project: Currently in the planning and evaluation stage, the goal is to increase the maximum crude oil transportation capacity of the Abqaiq-Yanbu channel; 3. Kirkuk-Baniyas crude oil pipeline repair project in Iraq: All parties are negotiating to restart the pipeline repair work, and relevant negotiations are supported by the United States; 4. Kirkuk-Ceyhan Pipeline Expansion Project in Iraq (Kirkuk-Ceyhan Pipeline): Continue to carry out capacity restoration and expansion transformation. If the pipeline is fully restored to operation, it will open up a northward channel for northern Iraq's crude oil to the Mediterranean, and create a new crude oil export channel that completely bypasses the Strait of Hormuz, thereby weakening Iran's gaming chips relying on shipping in the Strait of Hormuz; 5. Iraq’s Basra–Aqaba Crude Oil Pipeline (Basra–Aqaba Pipeline, BAP): It is a long-term planning project, and the feasibility study is still progressing at this stage; 6. Basra-Haditha Pipeline: In the planning and construction stage, the project aims to connect the oil fields in southern Iraq and reserve a westward outbound transmission channel; 7. Kuwait’s transit crude oil pipeline plan through Saudi Arabia: It is still in the research stage, and the plan is to rely on Saudi Arabia’s internal channels to realize Kuwait’s crude oil from the Red Sea coast. The industry pointed out that if most of the above-mentioned seven major energy pipeline projects in the construction, planning or discussion stages are successfully implemented, they may reshape the energy transportation map of the Persian Gulf and continue to weaken Iran’s shipping influence based on the Strait of Hormuz.