The war in the Middle East has forced the Gulf monarchies to rethink their trade and oil routes but rerouting them will be no simple task, experts say.
Faced with the closure of the Strait of Hormuz, the only maritime entry point to the Gulf, the region’s Arab nations are looking for ways to bypass Tehran’s stranglehold on their exports.
Related Stories
UAE Envoy Signals End to Gulf Dependence on Hormuz
Badr Jafar, the UAE’s special envoy for business and philanthropy, wrote in the Financial Times in early April that the Gulf states would never “return to a posture of strategic dependence on a narrow strait controlled by an unpredictable neighbour”.
He insisted that new pipeline and port capacity would be built and “the power grids, water systems and trade corridors connecting the region’s economies … formalized”. Economics, politics and regional diplomatic rivalries are likely to get in the way, however, experts told AFP.
New pipelines difficult
While Kuwait, Qatar and Bahrain have no coastline outside the Gulf and no alternative to the strait for seabound oil and gas, Saudi Arabia and the United Arab Emirates both have pipelines allowing them to ship at least some of their output from ports beyond Hormuz — and plan more.
Nevertheless, these pipelines only cover a fraction of the two nations’ pre-war exports and would need to be expanded if either country wanted to completely end their reliance on the Strait of Hormuz.
Robert Mogielnicki, of the Arab Gulf States Institute in Paris, said that building new pipelines “will take time” and such infrastructure would “still possess vulnerabilities”.
“Diversifying energy export supply routes is nevertheless going to be crucial in the years ahead,” he added.
Qatar’s Gas Lifeline Still Runs Through Hormuz
For liquefied natural gas, of which Qatar is by far the dominant producer in the region, the dependency on Hormuz is even greater.
Yet, as Frederic Schneider, a senior fellow at the Middle East Council on Global Affairs, explained, building alternative natural gas infrastructure would likely prove economically unattractive.
“The idea of a trans-Arabian gas pipeline has occasionally been floated but never progressed,” he said.
“The distances, political complexity, and cost make it unattractive against LNG tankers in normal conditions, and normal conditions are what pipeline economics are built on.”
Also Read: Dubai’s Rail Infrastructure is the New Real Estate Catalyst
