Bypassing Hormuz Does Not Mean Escaping Geography

There is no question that the Gulf’s energy geography is changing. Saudi Arabia, the United Arab Emirates and other regional producers have spent years investing in pipelines, storage facilities, export terminals and alternative loading points intended to reduce their dependence on the Strait of Hormuz. The current crisis has accelerated that process, strengthening the argument for what Jessica Obeid describes in her recent Middle East Institute Switzerland analysis, “The Search for Redundancy: Can Energy Producers Build Their Way Around the Strait of Hormuz?”, as “redundancy infrastructure”: pipelines, ports and alternative export corridors that prevent disruption at one point from bringing exports to a halt.

Obeid’s argument is persuasive. Redundancy is becoming an increasingly important component of Gulf energy security, and the UAE in particular is relatively well positioned because its Habshan-Fujairah pipeline gives Abu Dhabi direct access to the Gulf of Oman outside Hormuz. Saudi Arabia’s East-West Pipeline similarly allows crude from the kingdom’s eastern producing regions to reach Yanbu on the Red Sea. Iraq is considering several potential corridors toward the Mediterranean, while Kuwait has explored connections through neighbouring states. Collectively, these projects point toward a regional energy system with more options than existed even a decade ago.

But Obeid also makes the more important point: redundancy is not the same thing as replacement. Existing alternatives cannot accommodate all the oil and gas normally moving through Hormuz, new infrastructure takes years to construct, and moving production toward another coastline can simply transfer geopolitical exposure from one corridor to another. That is the point from which the analysis should be extended. The question is no longer simply whether producers can build pipelines around Hormuz. It is whether the entire downstream transportation system—ports, tankers, canals, pipelines, insurance markets and alternative maritime corridors—can absorb those displaced volumes at comparable scale, speed and cost.

The first constraint is simply one of scale. The US Energy Information Administration has consistently identified Hormuz as one of the world’s most important energy chokepoints, normally carrying roughly one-fifth of global petroleum liquids consumption. Alternative pipeline capacity is significant, but it remains much smaller than the volumes historically passing through the Strait. Moreover, headline pipeline figures generally describe total or nameplate capacity rather than genuinely spare capacity. A pipeline already carrying oil during normal operations cannot suddenly contribute its entire rated throughput as additional emergency capacity. Existing utilisation, pumping rates, maintenance, crude grades, storage, terminal throughput and contractual commitments all reduce the amount of genuinely available redundancy.

This distinction becomes even more important when proposed pipelines are included in estimates of future resilience. Infrastructure still under development may ultimately improve the strategic position of Gulf producers, but it cannot be treated as though it were already moving barrels. Nor can a single new pipeline necessarily replicate the flexibility of a maritime corridor through which different grades, exporters and tanker operators can move simultaneously. Without substantial twinning, additional pumping infrastructure, storage and corresponding terminal expansion, the difference between theoretical and usable capacity can remain considerable.

The UAE nonetheless has an important structural advantage. As Obeid notes, the existing Abu Dhabi Crude Oil Pipeline can move approximately 1.8 million barrels per day from Habshan to Fujairah, while additional infrastructure could significantly expand that capability. Fujairah is strategically valuable because it sits outside Hormuz and provides immediate access to the Gulf of Oman. That makes the UAE’s redundancy fundamentally different from Saudi Arabia’s. A barrel delivered to Fujairah has genuinely bypassed the Strait and can enter the Arabian Sea without passing through another immediate chokepoint.

Saudi Arabia’s East-West Pipeline creates a different geography. The pipeline avoids Hormuz, but it terminates at Yanbu on the Red Sea. As Obeid puts it, Saudi Arabia effectively trades one chokepoint risk for another. A barrel arriving at Yanbu has escaped Hormuz, but it has not escaped maritime geography. If its ultimate destination is China, India, Japan or South Korea, the most direct route is south through the Red Sea and Bab el-Mandeb before entering the Gulf of Aden and Indian Ocean.

That is precisely where the Houthi problem becomes inseparable from the discussion about Gulf energy redundancy. A major expansion of Saudi exports through Yanbu concentrates more strategic value in a maritime corridor that has already experienced sustained missile and drone attacks, blockade threats and other forms of coercion. Redundancy at the pipeline level therefore creates new dependency at the maritime level. Increasing East-West Pipeline throughput may make Saudi Arabia less dependent on Hormuz while simultaneously making the kingdom more dependent on the security of Bab el-Mandeb.

Recent shipping behaviour demonstrates the problem. Reuters reported on 18 August that major Chinese state shipping companies had stopped using both Hormuz and Bab el-Mandeb amid escalating regional security concerns. Instead, operators were increasingly using ship-to-ship transfers outside the Gulf, particularly around Fujairah and Oman, while some Saudi crude was being loaded through Egypt’s Sidi Kerir. Freight rates on the Oman-to-China route had reportedly risen to around $140,000 per day per vessel, roughly four times earlier levels. The oil remained available, but the cost and complexity of moving it had increased substantially.

There is an alternative to sending Saudi crude south from Yanbu: move it north toward Egypt, Suez and the Mediterranean. But this introduces a different set of constraints, particularly tanker size. Modern Very Large Crude Carriers are attractive precisely because they can move approximately two million barrels on one hull. The Suez Canal Authority imposes draft and dimensional limitations that mean a fully laden VLCC cannot always perform the same straightforward transit available to smaller tankers. Depending on vessel specifications and loading conditions, operators may need to reduce cargo, undertake lightering operations or use Egypt’s SUMED system.

The SUMED pipeline is therefore another critical piece of redundancy infrastructure. It allows crude arriving at Ain Sukhna on the Red Sea to move across Egypt to Sidi Kerir on the Mediterranean. A VLCC can discharge cargo, crude can move through storage and pipeline infrastructure, and another vessel can subsequently reload it on the Mediterranean side. Alternatively, a partially laden vessel can transit Suez and potentially reload afterwards. This provides valuable flexibility, but it also demonstrates why measuring resilience solely in pipeline barrels is misleading. Terminal capacity, storage, pumping capacity, scheduling and the availability of suitable tankers all become part of the same system.

Tanker class is especially important. One VLCC can carry roughly two million barrels. A Suezmax typically moves approximately one million barrels, while an Aframax carries less. If security or infrastructure constraints force a two-million-barrel movement to be divided among smaller vessels, the number of barrels has not changed, but the number of maritime movements has. What was previously one hull, one crew, one loading operation and one insured voyage may become two or three separate voyages. That has implications for freight rates, port congestion, crew availability, bunker consumption, insurance and vessel supply.

This is why the current disruption should not be assessed simply by asking whether replacement barrels can eventually reach the customer. They probably can in many cases. The more relevant question is at what cost, over what period and using how many additional transport assets. Reuters reported that Japan’s Idemitsu had begun sourcing Saudi crude using Suez and Cape of Good Hope alternatives because of disruption around Bab el-Mandeb. Routes that would normally take around 20 days could stretch toward 50–60 days. Energy security may therefore be maintained in a narrow physical sense while deteriorating considerably in terms of cost, inventory cycles, tanker utilisation and exposure to additional disruption.

Insurance provides another indication of the real price of this redistribution. Underwriters price the route actually being sailed, not the chokepoint successfully avoided. Moving crude out of Hormuz through Yanbu does not reduce war-risk costs if the replacement voyage is exposed to Houthi attacks in the Red Sea. Nor does a longer Cape routing remove costs; it substitutes additional sailing days, bunker consumption and vessel utilisation for the immediate security premium. The result is a system in which redundancy preserves movement but often by increasing the price of movement.

Piracy adds another dimension. Somali piracy does not need to return to its 2008–2011 peak before it becomes relevant to this equation. The Gulf of Aden and western Indian Ocean sit directly alongside the route connecting Bab el-Mandeb to Asian energy markets. A resurgence in successful hijackings or attempted boardings therefore adds criminal risk to a maritime environment already carrying missile risk, war-risk insurance premiums, routing uncertainty and elevated charter costs.

The relationship is broader than the possibility of pirates boarding a VLCC. Large crude carriers are difficult targets compared with many smaller commercial vessels, but piracy can still affect their economics indirectly by widening insurance-risk areas, increasing security expenditure, altering routes and contributing to crew-risk premiums. More importantly, a system relying increasingly on smaller tanker movements, offshore transfers, waiting vessels and additional transshipment creates a larger number of individual maritime activities. The workaround itself can expand the attack surface available to criminals.

The current situation therefore illustrates a broader principle: the more trade is pushed out of one constrained corridor, the more strategic importance accumulates in the alternatives. That creates a Dynamic Domino Effect across the energy transportation system. Hormuz disruption drives greater utilisation of alternative pipelines. Greater pipeline utilisation shifts cargo toward Fujairah and Yanbu. Yanbu increases exposure to the Red Sea. Avoiding Bab el-Mandeb pushes some cargo north toward Suez and SUMED or south around the Cape. These changes increase voyage times, tanker demand and freight costs, which in turn increase ship-to-ship transfers and reliance on alternative terminals. Meanwhile, insurers, adversaries and criminal networks respond to the new patterns of concentration.

Nor should the discussion remain confined to oil. This is one of the strongest points in Obeid’s analysis. Oil possesses at least some physical ability to move through pipelines to alternative coastlines. LNG does not have an equivalent option. Qatar’s export infrastructure is centred at Ras Laffan inside the Gulf. Creating an LNG export system of comparable scale outside Hormuz would require terminals, liquefaction facilities, pipelines, storage and supporting infrastructure that would take years and many billions of dollars to build. Regional gas pipelines such as Dolphin are strategically important, but they cannot substitute for Qatar’s seaborne LNG export industry.

The distinction is fundamental. Gulf oil has partial redundancy. Gulf LNG largely does not. Any assessment claiming that new pipelines are reducing the strategic importance of Hormuz therefore risks conflating two very different energy systems. Crude can, within limits, be pumped to another coastline. LNG requires an entirely different industrial chain.

Obeid also rightly expands the analysis beyond energy. Hormuz is important to fertilizer, ammonia, urea and helium flows, creating downstream implications for food security, healthcare, semiconductors, aerospace and advanced manufacturing. A chokepoint crisis therefore propagates through global supply chains in ways that cannot be captured by oil-price movements alone. The Strait is not simply an energy corridor; it is a geoeconomic artery.

What is emerging across the Gulf is therefore not independence from Hormuz, but corridor redundancy without corridor independence. The UAE is comparatively well positioned because Fujairah provides genuine access outside the Strait. Saudi Arabia possesses enormous cross-country pipeline capacity, but its principal alternative terminates in a Red Sea increasingly exposed to Houthi coercion. Iraq’s proposed alternatives remain expensive and time-consuming, Kuwait remains heavily dependent on neighbouring infrastructure, and Qatar faces a fundamentally different challenge because LNG cannot be redirected through crude pipelines.

The broader lesson is that Gulf energy security cannot be measured simply in kilometres of pipeline or nominal barrels per day. The entire movement chain has to be considered: pipelines, pumping stations, storage, export terminals, tanker availability, tanker class, draft restrictions, Suez and SUMED throughput, insurance, naval security, ship-to-ship transfers, Bab el-Mandeb, piracy exposure and ultimately the geography of the final customer.

This is where Obeid’s argument about redundancy becomes particularly powerful. Gulf producers should continue building alternative infrastructure; the current crisis makes the strategic rationale for doing so overwhelming. But redundancy should not create the illusion that maritime chokepoints can be engineered out of the global trading system. Indeed, the more successfully one chokepoint is bypassed, the greater the likelihood that traffic—and strategic attention—will concentrate somewhere else.

Recent events make that interdependence unusually visible. On 24 August, Reuters reported that commodity shipping through Hormuz remained roughly 90 per cent below pre-conflict levels. Yet the cargoes displaced from the Strait have not simply disappeared. They are being rerouted, transferred, delayed or moved through alternative corridors, while shipping companies absorb higher freight rates and greater operational complexity.

The Gulf can build more pipelines. It can twin existing systems, increase storage, expand Fujairah, develop Yanbu, strengthen SUMED and create additional export corridors. All of those investments will improve resilience.

What it cannot build is an alternative geography.

Bypassing a chokepoint therefore does not eliminate vulnerability. It moves that vulnerability to the next pipeline, port, tanker, terminal or strait in the chain. The real measure of resilience is not whether there is another line on the map, but whether the entire movement system can continue carrying the required volume at an economically and strategically sustainable cost.