en.Wedoany.com Reported - Shipbroker Gibson's latest weekly report analyzes that even if an agreement ensuring safe passage for vessels through the Strait of Hormuz could be reached, the region would remain a potential flashpoint. Middle Eastern oil producers are steadily advancing alternative export routes that bypass the Strait of Hormuz, with pipeline construction emerging as the primary focus.
Gibson noted that as regional conflicts persist, Middle Eastern exporters continue to adapt their operations, with geographic positioning and access to routes bypassing Hormuz being key success factors. Saudi Arabia, the UAE, and Oman all possess domestic ports outside the Strait of Hormuz and have become beneficiaries, yet they still lack sufficient alternative export pipelines. Iraq can access the Mediterranean via Turkey and has been trucking fuel oil through Syria, though this route remains vulnerable to regional politics and bilateral relations. As regional producers push to expand export options beyond Hormuz, monitoring the progress of these projects is crucial for assessing long-term tanker demand trends.
Saudi Arabia is considering boosting pipeline capacity to the Red Sea by up to 2 million barrels per day. Kuwait has indicated it is in discussions with Riyadh to expand the system to accommodate Kuwaiti crude. Reports suggest refined product exports are also under consideration, though no timeline has been provided. The main bottleneck lies in loading capacity at Yanbu, where port infrastructure improvements are needed to unlock the full 7 million barrels per day capacity of the existing East-West Pipeline. Average crude loadings at Yanbu stand at 4.65 million barrels per day, testing infrastructure limits against a prior record of 1.7 million barrels per day. The UAE is advancing construction of a second pipeline to Fujairah, which would double capacity to 3.6 million barrels per day, providing ample hedging against any future Hormuz disruption. Once port infrastructure is completed, the pipeline could become operational in late 2027.
Iraq, one of the countries most exposed to a Hormuz closure, has long possessed an export route via Turkey to the Mediterranean. The route has a technical capacity of 1.6 million barrels per day, but due to damage and corrosion in the federal pipeline, only the Kurdistan Regional Government (KRG) segment is currently partially operational. Exports via Turkey have at times reached 600,000 barrels per day, but since the restart in late 2025, flows have barely exceeded 200,000 barrels per day. Even if Hormuz were closed, Iraq would struggle to utilize this alternative route. The country is developing a 2.25 million barrels per day pipeline connecting Basra to the Kirkuk-Ceyhan system at Haditha, provided that repairs can restore export capacity via Turkey to 1.5 million barrels per day. There are also proposals for a second 1 million barrels per day pipeline from Haditha to Aqaba, Jordan; a recent memorandum of understanding with Syria envisions an 800-kilometer pipeline from Haditha to Banias with a capacity of 2.5 million barrels per day. Timelines for both projects remain unclear. The project linking Basra to Duqm, Oman, appears to have stalled.
In terms of tanker impact, Gibson believes the key will be which pipelines are actually built and their utilization levels. Prior to this year, Yanbu exports rarely exceeded one-third of export capacity. Iraq's westbound pipeline could be similar, primarily serving European demand. Asian buyers prefer loading from the Gulf during normal times, and given that demand growth is concentrated in the East, westbound export routes may face underutilization. For the UAE, the impact on tankers would be limited—if exports permanently shift to Fujairah, there would be some loss of demand, but this could be offset by rising UAE production. The largest impact could fall on tankers transporting Iraqi crude to Europe, using very large crude carriers (VLCCs) and Suezmax vessels, with Iraqi volumes to Europe averaging around 700,000 barrels per day in 2025. The impact on product tankers is likely to be minimal, as only Saudi Arabia is currently considering building a refined products pipeline to the Red Sea.
Gibson concluded that these projects are designed to provide insurance for Gulf producers, while also offering the same for tankers, meaning that if Hormuz tensions persist for years or recur in the future, the market will be less vulnerable to cargo losses than before. However, pipelines themselves face security challenges and are difficult to defend, particularly as they traverse countries with active rebel groups and foreign-backed militias, while the advent of low-cost drone warfare has lowered the level of sophistication required to disrupt oil exports.
