The Strait of Hormuz has remained one of the most important bottlenecks in the global energy sector for years. Last year, on average, approximately 20 million barrels of crude oil and petroleum products were transported per day.
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The region's largest economies – Iran, Iraq, Kuwait, Qatar and Bahrain – use Hormuz to export most of their raw materials. While Saudi Arabia and the United Arab Emirates have alternative routes through the Red Sea or the Gulf of Oman, their capacity remains limited and only accounts for a small fraction of standard exports.
Costly and complicated investments in the Middle East
As the daily reports, citing government and business representatives, the construction of pipelines bypassing the Strait of Hormuz is one of the most seriously analyzed options for securing the export of raw materials.
As noted by the Emirati daily “National”, in the current situation “all Gulf countries need alternatives so that they cannot be treated as hostages.”
The construction of new pipelines could significantly reduce the region's dependence on the Strait of Hormuz, but – as the Financial Times emphasizes – these projects would be extremely expensive and politically difficult. They would require the cooperation of many countries and the creation of new export terminals.
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According to the Washington Post, providing alternative routes for even half of the oil exported would require building a vast network of infrastructure the cost could reach up to $100 billion.
The current blockade of the strait and tensions in the region – including Iran's demands for ship passage fees – are accelerating discussions about diversifying transport routes. Experts quoted by the Financial Times indicate that Such projects would take years to implement, but could permanently change the balance of power in the global energy market.
