Gulf producers look to pipelines, overseas storage to bypass Hormuz: Energy expert

Middle East oil producers are increasingly investing in alternative export pipelines, overseas crude storage, and international energy assets to minimize their reliance on the Strait of Hormuz, according to energy expert Anas F Alhajji. Countries such as Saudi Arabia, the UAE, Kuwait, and Iraq are exploring new pipeline routes, storage facilities in overseas markets, and other avenues to reshape their oil export infrastructure.

The expert warns that increased transportation costs could become unsustainable if oil prices drop, potentially leading to investment cuts and a new crisis in the industry. Alhajji highlights that pipeline expansions offer a more profitable and sustainable alternative to shipping through the Hormuz, with the UAE's second crude oil pipeline to Fujairah nearing completion and expected to be commissioned by June 2027.

Saudi Arabia is also expanding its Hormuz-bypass pipeline capacity, while Kuwait and Iraq are looking into connecting their export infrastructure to alternative shipping routes. In addition to pipelines and storage, Gulf energy companies are diversifying their revenue sources by investing internationally, such as Saudi Aramco's expansion and ADNOC's acquisitions in Western Australia and Qatar.