Middle East oil producers seek Strait of Hormuz alternatives as the U.S.-Iran war escalates - CBS News

What the report says

CBS News reported that Gulf oil producers are moving to reduce reliance on the Strait of Hormuz as conflict involving the U.S. and Iran disrupts shipping and pushes energy prices higher. Before the war, about 15 million barrels of Persian Gulf oil moved through the strait each day, but traffic has fallen sharply, and Brent crude rose above $100 a barrel on Thursday, according to the report.

The report says governments and energy companies are pursuing or weighing at least seven major pipeline projects to shift more exports toward ports on the Red Sea, the Gulf of Oman and the Mediterranean. Saudi Arabia’s existing East-West pipeline and the United Arab Emirates’ route to Fujairah have been key alternatives and are now operating near capacity. Abu Dhabi’s state oil company is also accelerating a roughly $3 billion, 200-mile parallel pipeline to Fujairah, with completion expected around 2027.

Iraq is also examining alternatives for oil from Basra, including routes to Ceyhan in Turkey, Baniyas in Syria and Aqaba in Jordan. CBS cited Goldman Sachs analysts as estimating that bypass projects could add 3.8 million barrels a day of capacity by the end of next year and 7.3 million barrels a day by the end of 2028.

The shift matters because Hormuz is a critical passage for global oil and liquefied natural gas, but CBS noted that alternative routes carry their own risks. The Red Sea and Bab el-Mandeb have faced Houthi attacks, pipelines can be targeted, and some routes are longer, costlier or less useful for Asian buyers.