Gulf states rush pipelines, land bridges as Hormuz blockade enters fourth month
Four months into the Strait of Hormuz blockade, Gulf nations are accelerating pipeline projects, truck convoys and rail revivals to keep oil and goods flowing. A Dutch think tank calls the disruption the 'largest energy shock in history'.
The four-month blockade
Around four months have passed since the Strait of Hormuz was largely blocked, and despite a US-Iran framework agreement the conflict has recently escalated. Iran again claims full control of the waterway. A quarter of the world's seaborne oil transits the strait, and while some can be diverted through existing pipelines in Saudi Arabia, the Emirates and Iraq, the rest remains almost entirely stranded. The Dutch think tank HCSS describes the disruption as
.the largest and most complex energy shock in history
- Strait of Hormuz
- 25
- Other routes
- 75
UAE accelerates pipeline expansion
The United Arab Emirates is speeding up construction of a new West-East pipeline to the Gulf of Oman, aiming to double capacity from 1.8 to 3.6 million barrels per day and bring it online as early as next year. A more futuristic proposal, the "Road of Unity", envisions an artificial maritime corridor across the Emirates from the Persian Gulf to Oman, though the Dubai architecture firm behind the concept admits it remains largely a design exercise.
Kuwait's historic export halt
Kuwait, squeezed in the northwestern Gulf, is entirely dependent on sea routes. According to Tankertrackers.com, the country exported no oil at all in April, the first such month since 1991. Chairman Nawaf Al Sabah of Kuwait's state oil company said in Washington that routing Kuwaiti crude through Emirati and Saudi pipelines is being explored. Discussions also include reviving the Trans-Arabian Pipeline (Tapline), which pumped oil from eastern Saudi Arabia to Lebanon's Mediterranean coast from 1950 until it was shut in 1990.
Land bridges and rail revival
Shipping lines are turning to desert convoys. MSC announced new truck routes across Saudi Arabia in May, and Maersk has been informing customers for weeks about land bridges serving Saudi Arabia, Bahrain and Qatar. Simultaneously, Turkey and Saudi Arabia are discussing revival of an Ottoman-era rail route through Jordan and Syria, though funding and a start date remain unclear.
Multimodal future
Kyle Henderson, a global container traffic analyst, told FDI Intelligence that the decline in sea-route reliability is rewriting trade in multimodal transport.
Saudi Arabia is also weighing an increase in its worldwide oil storage capacity. As the blockade drags on, the region is reshaping supply chains faster than many thought possible.Transfers from sea to land in Saudi Arabia, Oman and Turkey would become decisive connections in global container flows in a way never seen before.
