The unintended consequence of Iran’s threat to the Strait of Hormuz may be the permanent erosion of its greatest strategic advantage

For decades, the Strait of Hormuz has been Iran’s greatest strategic asset.

The ability to threaten one of the world’s most important oil shipping routes gave Tehran influence far beyond its economic or military strength. Every government and every major energy producer understood that any serious disruption to the Strait would reverberate through global energy markets.

That disruption has now occurred.

History shows that when a strategic chokepoint becomes an economic weapon, governments and industries begin finding ways around it. That is precisely what is now happening. Oil supply lines connecting producers to markets are being redrawn, and efforts are underway to reduce global dependence on the Strait.

The result is a growing regional effort to build export routes that bypass the Strait altogether.

In a note released last week, analysts at Goldman Sachs estimated that seven different pipeline projects are now being planned across the region. By the end of 2028, they could carry about 14 million barrels of oil per day—roughly 60 per cent of the volume that previously moved through the Strait of Hormuz. Before the conflict, approximately 23 million barrels per day transited the Strait.

Saudi Arabia’s response illustrates the broader trend.

The disruption to shipping through the Strait has severely affected Saudi crude exports. Most of the kingdom’s oil previously moved through the Strait. Saudi Arabia has relied more heavily on its East-West Pipeline, which carries crude to Yanbu on the Red Sea. But that route cannot fully replace Hormuz because its export capacity remains well below the kingdom’s previous export levels.

Reuters reports Saudi Arabia is now considering expanding the pipeline’s capacity to nine million barrels per day. Sources told the news agency the kingdom is also in preliminary discussions with neighbouring countries on projects that would allow even more crude to bypass the Strait of Hormuz.

The United Arab Emirates has reached the same strategic conclusion: dependence on Hormuz now carries unacceptable geopolitical risk.

The UAE has fast-tracked construction of a second west-to-east pipeline that bypasses the Strait. Scheduled for completion in 2027, it will run parallel to the existing Habshan-Fujairah Pipeline and double the country’s overland export capacity to about 3.6 million barrels per day.

The Financial Times reported that a Dubai-based supply chain operator is in talks to build a new port and container terminal in Fujairah, further reducing the country’s reliance on the Strait.

For Iraq, the disruption has reinforced the urgency of developing export routes that cannot be interrupted through Hormuz.

Because of limited pipeline infrastructure, Baghdad relies heavily on its southern Basra export terminal on the Persian Gulf. Basra remains within range of Iranian projectiles. Last Thursday, a drone struck a vessel near Basra Oil Terminal, the second drone incident involving the province’s port infrastructure in two days.

According to OPEC data, Iraq’s oil production fell by more than 50 per cent to about 1.9 million barrels per day in June, compared with roughly 4.2 million barrels per day before the conflict. Since April, Iraq has been trucking crude through Syria to reduce its dependence on shipping through the Strait.

Baghdad is pursuing two major pipeline projects: one would expand exports through Turkey’s Mediterranean port of Ceyhan, while the other would rebuild the long-idled Kirkuk-Baniyas pipeline to Syria’s Mediterranean coast.

Last week, Iraq and Syria signed an agreement to reconstruct the 700,000-barrel-per-day pipeline, which has been out of service since it was damaged during the 2003 U.S. invasion of Iraq.

Iraq’s state news agency reported that Chevron will carry out the project. Thomas Barrack, the U.S. ambassador to Turkey, said the pipeline agreements would support a program that could eventually make the Strait of Hormuz “an afterthought.”

TotalEnergies chief executive Patrick Pouyanne has also argued that Syria could become “an important transit country for oil coming from Iraq to the Mediterranean,” particularly given the need for alternative export routes.

Construction is already underway on Iraq’s much larger Basra-Haditha pipeline. Approved in 2024, the project began this spring. It will carry 2.5 million barrels per day from Basra toward Jordan’s Red Sea port of Aqaba before linking with future routes through Syria and Turkey.

Even countries with fewer immediate alternatives are reassessing their dependence on the Strait.

Reports indicate Qatar is examining options for exporting liquefied natural gas through Saudi Arabia, according to Reuters. Kuwait, meanwhile, is discussing expanded access to Saudi and Emirati pipeline networks.

Perhaps the greatest irony is that Iran itself recognized this vulnerability long before the current conflict.

To reduce dependence on its Kharg Island loading terminal, Tehran built the 1,000-kilometre Goreh-Jask pipeline to the Gulf of Oman. Designed to carry one million barrels per day, the project has never come close to achieving its intended capacity because of sanctions and unfinished infrastructure.

The U.S. Energy Information Administration estimated that fewer than 70,000 barrels per day were flowing through the pipeline during the summer of 2024. Loadings stopped altogether in September, and according to energy analytics firm Kpler, only one tanker has loaded at Jask during the current conflict.

The reassessment extends beyond the Gulf. Canada’s renewed interest in expanding pipeline capacity reflects the same lesson: secure export routes are becoming as strategically important as the resources themselves. Although Canada’s circumstances differ from those of Gulf producers, the underlying lesson is the same: governments increasingly view secure export routes as a strategic asset rather than simply transportation infrastructure. The proposed pipeline from Alberta to British Columbia’s coast, along with renewed interest in an Alberta-to-Sarnia pipeline, reflects that broader recognition.

Pipelines are complex, expensive and time-consuming projects. They will not eliminate dependence on the Strait of Hormuz overnight. By the time many are completed, global oil demand may look very different, with the International Energy Agency already warning of slower long-term demand growth.

Yet those uncertainties do not alter the strategic direction. Once governments conclude that a critical export route has become an unacceptable geopolitical risk, they rarely reverse course. The billions now being committed to new pipelines and export terminals will reshape global energy flows long after the current conflict has ended. Every additional barrel reaching world markets without passing through the Strait permanently reduces the strategic value of that waterway.

Iran has reminded the world how vulnerable global energy markets remain when too much oil depends on a single waterway. The world’s response is to make sure that no country can wield that power so easily again.

Rashid Husain Syed is a highly regarded analyst specializing in energy and politics, particularly in the Middle East. In addition to his contributions to local and international newspapers, Rashid frequently lends his expertise as a speaker at global conferences. Organizations such as the Department of Energy in Washington and the International Energy Agency in Paris have sought his insights on global energy matters.