The months-long Gulf war has fundamentally changed the way Middle Eastern producers should think about supply security. That is unlikely to change, regardless of how or when the Strait of Hormuz sustainably resumes carrying around a fifth of the world’s oil supplies.
Even if a fresh diplomatic understanding succeeds in restoring oil flows, recent events have demonstrated how fragile such arrangements can prove. The collapse of the June 17 US-Iran Memorandum of Understanding reinforced a broader lesson: resilience cannot depend on the assumption that geopolitical tensions will remain contained.
How should oil supply resilience be defined in the post-war era? That question deserves careful consideration before embracing what may appear, at first glance, to be the obvious solution – or even the complete answer.
Strategic value of bypass pipelines
One clear lesson from the conflict has been the strategic value of bypass pipelines. Their success in preserving export flows has rightly elevated them from contingency assets to strategic priorities. But it would be more prudent to regard them as the starting point of the Gulf’s resilience strategy rather than its endpoint.
Saudi Arabia’s East-West Pipeline and the UAE’s Habshan-Fujairah line allowed millions of barrels per day of crude to continue reaching international markets through the prolonged disruption in Hormuz. With capacities of up to 7 million b/d and 1.8 million b/d respectively, they became the Gulf’s only large-scale bypasses to the Strait. Without them, the global supply shock would have been considerably more severe. It is therefore hardly surprising that expanding such alternatives has become a strategic priority across the region.
Abu Dhabi already has a project underway that will double the capacity of the Habshan-Fujairah pipeline next year. Saudi Arabia is also considering adding another 1-2 million b/d of capacity to its East-West Pipeline and has reportedly discussed allowing neighbouring producers to use the expanded system, potentially transforming it into a regional export corridor.
The Iraq-Syria-Turkey scenario
The ripple effects are spreading beyond the Gulf's two largest exporters. Iraq has revived ambitions to diversify its export routes through Syria while seeking to maximise throughput via the Kirkuk-Ceyhan pipeline to Turkey. Both projects reflect the same strategic conclusion: dependence on a single maritime chokepoint has become too great a commercial risk.
Yet Iraq’s experience also illustrates that bypasses are easier to envisage than to realise. Political instability in Syria clouds the prospects for a Mediterranean route, while expanding flows through Kirkuk-Ceyhan would require substantial new infrastructure to move crude from Iraq’s giant southern oil fields to the north.
Even where such projects overcome the formidable hurdles of technical, commercial and political viability, there is a danger in viewing them as the answer to the Gulf’s energy security challenge.
Lengthy diversions
The Houthi campaign against Saudi shipping in recent weeks is a case in point. Backed by Iran, the group declared a maritime blockade on Saudi-linked vessels, demanding that Riyadh cease military operations against Houthi-controlled territory and pay billions of dollars in compensation. The Houthis attacked or threatened tankers transiting the Bab el-Mandeb Strait, forcing Aramco to reroute some crude loaded at Yanbu north through the Suez Canal and Egypt’s SUMED pipeline before reloading it onto tankers in the Mediterranean for Asia-bound voyages. The diversion adds roughly three weeks to the journey while significantly increasing freight costs.
Even that alternative route is not immune from the conflict. On July 29, an unidentified drone struck two gas vessels at Egypt's Mediterranean port of Damietta, igniting fires and marking the first direct attack on Egyptian energy infrastructure during the war. No group claimed responsibility, but the incident underscored how quickly even routes once considered comparatively insulated can become exposed as hostilities widen.
Iranian attacks near Fujairah and even Omani ports well outside Hormuz earlier in the war, together with repeated missile and drone strikes on major energy infrastructure across Saudi Arabia and the UAE, point to the same conclusion. Dispersed pipelines, ports and export terminals reduce dependence on individual routes and chokepoints, but they cannot fully insulate the region’s energy system in an era of long-range missiles and drones. Even when bypasses preserve supply, they rarely preserve efficiency. Every diversion inevitably adds time, cost and complexity to the delivery chain.
Strengthening physical resilience
None of this diminishes the importance of continuing to strengthen physical resilience. More pipeline capacity, greater redundancy in export terminals, additional alternative maritime routes and strategically located oil storages outside the Gulf should all remain priorities. Jointly developed emergency stockpiles closer to major demand centres in South and Southeast Asia could provide an additional layer of insurance, giving both producers and consumers greater flexibility to manage future disruptions.
Yet the Iran war has also exposed the limits of engineering around geopolitical risk. While the region's centuries-old rivalries are unlikely to disappear, Gulf states have a growing strategic interest in strengthening regional mechanisms for dialogue, crisis communication and maritime deconfliction. The more successful those efforts become, the less often the region will need to rely on its contingency infrastructure. Ultimately, there are no bypasses to regional harmony.
Energy Connects includes information by a variety of sources, such as contributing experts, external journalists and comments from attendees of our events, which may contain personal opinion of others. All opinions expressed are solely the views of the author(s) and do not necessarily reflect the opinions of Energy Connects, dmg events, its parent company DMGT or any affiliates of the same.
