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- We are not united by Hormuz: how the countries of the Middle East are trying to bypass Iran
We are not united by Hormuz: how the countries of the Middle East are trying to bypass Iran
The Strait of Hormuz has remained closed for about a month. The damage to the global market is enormous: up to 20% of offshore oil and LNG exports passed through it. Iran is ready to allow individual vessels to pass through, but has actually introduced a transit fee of up to $2 million per flight. Against this background, the countries of the Middle East are looking for a workaround. There are alternatives, but so far it's all about money and time. Whether the current crisis will be the beginning of the end of dependence on Hormuz and who will be able to make money on new routes is in the Izvestia article.
The passage is on pause
About 400 vessels are anchored in the Strait of Hormuz, awaiting passage permission from the Iranian authorities. Conditions have been set in Tehran: operators must contact a company affiliated with the Islamic Revolutionary Guard Corps (IRGC) and provide it with information about the owner, flag, cargo, crew and destination. If the vehicle is not connected to countries that Iran considers hostile, it will be offered to pay for passage. The price for tankers is $1 per barrel.
But even if some of the vessels agree to Iran's terms, traffic through Hormuz will remain limited. This means that the prolonged lockdown will continue to hit the global market. In the United States, consumers have already felt the price increase. The average cost of gasoline has exceeded $4 per gallon (3.7 liters), and in some states, primarily in California, it is over $5.
Against this background, US President Donald Trump called on the allies to forcibly restore control over the strait: "The countries of the world that receive oil through the Strait of Hormuz must take care of this passage. <...> Go to the strait and just take it. Protect him. Use it for yourself."
However, not all of Washington's allies are ready for such drastic actions. French President Emmanuel Macron called the proposal unrealistic.
"It would take forever and would put everyone who passes through the strait at risk from the IRGC, as well as ballistic missiles," he explained.
British Prime Minister Keir Starmer took a more cautious stance. He initiated a meeting of foreign ministers from 35 countries to discuss ways to solve the problem and possible steps to ensure the safety of navigation after the end of hostilities.
British Prime Minister Keir Starmer during a press conference in London
At the same time, the states of the Middle East themselves began to think about another scenario — not to try to regain control of Hormuz at any cost, but to reduce dependence on it. Saudi Arabia, the United Arab Emirates and Israel, according to media reports, are already discussing new oil and gas supply routes bypassing the strait. Even if such projects cost billions of dollars and take several years, they are seen as the only way to avoid a repeat of the current crisis.
Real prospects
There is nothing fantastic about creating an alternative to the Strait of Hormuz, says Irina Sozdatel, Vice President of the Association of Exporters and Importers.
— It is technologically possible to build or expand pipeline routes, and similar projects have already been implemented in different parts of the world. The key question here is whether, when, and at what cost," she points out.
The most realistic option is to increase the capacity of the Saudi East–West oil pipeline, also known as Petroline. It begins in the area of the Abqaiq field on the coast of the Persian Gulf, crosses the entire territory of Saudi Arabia and reaches the port of Yanbu on the Red Sea. This allows oil to be shipped to Europe and other regions, bypassing the Strait of Hormuz.
— This is an understandable engineering task, although it is not cheap.: Christopher Bush, CEO of Cat Group, estimates that simply duplicating the route will cost at least $5 billion, since the route passes through the basalt mountains of the Hejaz," Mikhail Nikitin, head of International Business and Finance Practice, explains to Izvestia.
Currently, the throughput capacity of Petroline is about 7 million barrels per day. Technically, it can be increased by another 1-2 million barrels due to additional threads and new pumping stations. At the same time, high investments may be quite acceptable for Saudi Arabia: the infrastructure and the corridor itself already exist.
More ambitious options are also being discussed. One of them is the creation of a transport and energy corridor from India through the UAE, Saudi Arabia and Jordan to the Israeli port of Haifa. From there, oil and gas could flow to Europe via the Mediterranean Sea. The project was presented back in 2023 at the G20 summit in New Delhi, but it remained on paper.
Haifa Port
The main problem is that the route requires the consent of several states with conflicting interests at once, Olga Veretennikova, vice president of the Borsell analytical company, explains to Izvestia. According to her estimates, even in a favorable political environment, the project will take at least 7-10 years to complete, and the cost may amount to tens or even hundreds of billions of dollars.
— The route through Haifa theoretically provides direct access to the Mediterranean Sea, but it runs into the current war, high risk to infrastructure and extremely contradictory relations between Arab countries and Israel against the background of the conflict with Iran. In the short and medium term, this is more of a geopolitical idea than a real project," the expert believes.
In her opinion, in the next 3-5 years, the most realistic scenario remains the expansion of existing routes through Saudi Arabia, the United Arab Emirates and partly Iraq, rather than the construction of new corridors to the Mediterranean Sea.
The Great Perestroika
The emergence of alternative logistics routes may shake the balance of power in the Middle East, experts interviewed by Izvestia believe. First of all, Iran will partially lose its main lever of pressure on its neighbors and the global market.
At the same time, the role of countries controlling land routes will increase. Saudi Arabia can become the main oil transit country between the Persian Gulf and the Red Sea, and the UAE can strengthen the importance of the port of Fujairah as the largest hub outside of Hormuz, Olga Veretennikova points out.
If routes through Iraq, Jordan and Israel are ever implemented, the countries of the Eastern Mediterranean will receive additional weight, she admits. On the contrary, States that have no workarounds, primarily Qatar and Kuwait, will find themselves even more dependent on the situation around the strait.
"But even if alternatives appear, Ormuz will remain the most important hub: it will be impossible to completely replace it in terms of volume and cost of transportation in the foreseeable future," the Izvestia interlocutor emphasizes. — This is not about excluding Hormuz from supply chains, but about a gradual redistribution of influence: Saudi Arabia and the UAE will gain additional strategic weight, while Iran will lose some of its leverage, but not lose it completely.
At the same time, it is far from certain that countries will eventually start implementing large-scale projects, Mikhail Nikitin notes. Such routes are regularly discussed, but each time they run into the same problem — the need to reach an agreement between several states whose interests do not coincide.
— Routes through Jordan, Syria, and Israel have been discussed for decades: at conferences, in ministerial memoranda, and in strategic doctrines. All this stalled in peacetime, with stable prices and functioning diplomatic channels. Now, when the region is on fire, insurers have left, and transit countries themselves are under pressure, the chances of new agreements tend to zero," the expert summarizes.
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