How Gulf pipelines could redraw the region’s economic map – Firstpost

For decades, a narrow 33-kilometer-wide waterway has held enormous power over the global economy. The Strait of Hormuz, sitting between the Persian Gulf and the Gulf of Oman, has been the world’s most important energy chokepoint, carrying millions of barrels of crude oil every day from West Asia to markets across Asia, Europe and beyond.

Nearly 20 per cent of the world’s oil consumption passes through this single route. Any disruption can send shockwaves across global markets, pushing crude prices higher, increasing inflation risks and threatening the economies that depend on energy exports.

Now, Gulf nations are preparing for a future where their prosperity is no longer controlled by one vulnerable passage. Saudi Arabia, the United Arab Emirates (UAE), Iraq and other producers are accelerating investments in pipelines, ports, rail corridors and storage hubs to keep oil moving even if the Strait of Hormuz faces disruption.

The shift represents one of the biggest changes in West Asia’s energy strategy in decades, moving from an era focused purely on pumping more oil to one focused on securing how that oil reaches the world.

UAE’s Fujairah strategy: Building an oil exit beyond Hormuz

The UAE has emerged as one of the most aggressive players in creating an alternative energy route. Its Abu Dhabi Crude Oil Pipeline (ADCOP), which became operational in 2012, stretches around 380 kilometres from Habshan oil fields to Fujairah, a port located outside the Strait of Hormuz.

The location is strategically important. Unlike ports inside the Persian Gulf, Fujairah allows tankers to enter the Gulf of Oman and global shipping routes without crossing Hormuz. The pipeline can transport around 1.5 million barrels per day (bpd), giving the UAE a crucial backup system during periods of geopolitical instability.

Abu Dhabi is also expanding storage and export infrastructure around Fujairah, aiming to strengthen its position as a global energy trading hub.

Saudi Arabia’s Red Sea lifeline

Saudi Arabia has spent decades preparing for a similar challenge. Its East-West Pipeline, also called Petroline, runs around 1,200 kilometres from the oil-rich Eastern Province to Yanbu on the Red Sea coast.

The network allows Saudi crude to bypass the Persian Gulf and move directly towards international markets through the Red Sea. For the world’s largest crude exporters, such infrastructure has become more than a transport system — it is an economic insurance policy.

Iraq’s biggest vulnerability

While Saudi Arabia and the UAE have built alternatives, Iraq remains among the most exposed economies. Oil dominates Iraq’s finances, accounting for nearly 90 per cent of government revenue. Much of its crude export infrastructure depends on southern routes linked to the Persian Gulf.

This dependence has pushed Baghdad to revive interest in northern export corridors connecting Iraqi oil fields to Turkey’s Mediterranean port of Ceyhan.

A stronger northern route would allow Iraq to diversify its exports and reduce the economic damage caused by any future disruption around Hormuz.

Pipelines are powerful but not perfect

Despite their importance, pipelines are not a complete solution. West Asia’s history shows that energy corridors are often affected by politics as much as engineering.

The Trans-Arabian Pipeline (TAPLINE), once designed to move Saudi crude to the Mediterranean, eventually lost relevance due to political tensions and changing energy economics.

Several Iraqi pipelines through neighbouring countries have also faced repeated shutdowns because of wars, sanctions and diplomatic disputes. This means future energy security will depend not only on billions of dollars spent on infrastructure but also on regional cooperation.

Still, a new oil map is clearly emerging. For decades, the question was how much oil Gulf countries could produce. The new question is how safely they can deliver it. The Strait of Hormuz will remain a pillar of global energy trade, but Gulf economies are building alternative lifelines to ensure that one chokepoint can no longer decide their economic future.