The latest

Gulf energy exporters are accelerating multibillion-dollar projects to bypass the Strait of Hormuz, after the war in Iran severely curtailed shipping through a route that carried about 20 million barrels of crude daily before US and Israeli strikes began on February 28. Governments and companies are expanding pipelines, considering eastern-coast gas facilities and increasing storage in Asia, treating route diversification as a long-term security hedge even if Washington and Tehran reach a ceasefire.

Details

• Traffic collapse: Kpler estimated crude exports through Hormuz at about 3.7 million barrels a day in the week before the report, down from roughly 20 million before the conflict. The total leaving the Gulf is higher because some tankers disable location systems and millions of barrels use existing pipelines outside the strait.
• Maritime danger: The report attributed the disruption to overlapping US and Iranian blockades, sea mines, missile strikes and soaring insurance costs. It said vessels still transiting face Iranian attack drones, while others sail “dark.” At least 17 seafarers have been killed in the region.
• Abu Dhabi bypass: An Emirati project aims to double bypass capacity to 3.6 million barrels daily, allowing nearly all Abu Dhabi’s onshore crude to reach international tankers without entering Hormuz. The supplied report did not identify the project or give a completion date.
• ADNOC gas plans: State-owned ADNOC said it would spend $8.2 billion expanding its natural gas business. Chief financial officer Peter van Driel told Bloomberg Television that the company was also considering a liquefied gas export facility on the UAE’s eastern coast to avoid Hormuz.
• Saudi outlet: Aramco is accelerating a multibillion-dollar expansion of the 1,201-kilometre East-West Pipeline, built during the Iran-Iraq war and running to Yanbu on the Red Sea. Chairman Yasir Al-Rumayyan called it Saudi Arabia’s economic “lifeline”; the report said it has rerouted about seven million barrels daily since Hormuz was effectively closed.
• Strategic cost: Ben Cahill, an energy analyst at the University of Texas at Austin, said producers now value secure infrastructure despite higher costs and lower efficiency. He said many expect Hormuz never to recover its prewar share of oil exports.

Between the lines

Diversification could weaken Iran’s ability to influence regional energy flows, but the shift will take years and billions of dollars. It also marks a departure from the Gulf’s previous focus on the cheapest, fastest export route toward redundancy across pipelines, ports and overseas storage.

What’s next

Attention now turns to ADNOC’s decision on the proposed eastern-coast LNG facility, the implementation timetable for Aramco’s East-West expansion and Kpler’s next weekly estimate of Hormuz crude flows.