Gulf oil producers are investing billions of dollars to build infrastructure that bypasses the Strait of Hormuz, as the ongoing war in Iran has sharply curtailed shipping through what has long been the region’s most efficient export route. The scramble to diversify transit options marks a fundamental shift in how the Persian Gulf’s oil economy operates, with producers concluding that heavy reliance on a single, narrow waterway is no longer a risk worth taking, even if a cease-fire between the United States and Iran eventually takes hold.

A Chokepoint Under Siege

Before the United States and Israel began military strikes on Iran on February 28, roughly 20 million barrels of crude oil moved through the Strait of Hormuz each day, linking the Gulf of Oman with the Persian Gulf. That volume has collapsed under the weight of overlapping American and Iranian blockades, sea mines, missile strikes and sharply rising insurance costs. As of last week, crude exports through the strait had fallen to approximately 3.7 million barrels a day, according to maritime tracking firm Kpler.

The strait has become genuinely dangerous to navigate. Tankers still using the route often do so while contending with Iranian attack drones or by disabling their location-tracking devices to avoid detection. At least 17 seafarers have been killed in the surrounding waters during the conflict. Some oil continues to reach international markets through vessels taking deliberate steps to evade tracking, and additional volumes move through pipelines that never depended on the strait in the first place.

A Region-Wide Building Effort

The response from Gulf governments and energy companies has been extensive. In Fujairah, a United Arab Emirates port city on the Gulf of Oman, construction crews are working continuously to lay a second crude pipeline alongside an existing line that carries oil from onshore fields in Abu Dhabi. The project is intended to double the country’s bypass capacity to 3.6 million barrels per day, which would allow nearly all of Abu Dhabi’s onshore crude production to reach international tankers without passing through Hormuz at all.

The UAE’s state energy company, Abu Dhabi National Oil Company, known as ADNOC, announced this week that it plans to spend $8.2 billion expanding its natural gas business. The company is also weighing construction of a liquefied gas export facility on the UAE’s eastern coast as another means of avoiding the strait, according to Peter van Driel, chief financial officer of ADNOC Gas, who discussed the plans with Bloomberg Television.

Saudi Arabia’s state oil giant, Aramco, is accelerating expansion of its East-West Pipeline, a 1,201-kilometer route built during the Iran-Iraq war in the 1980s that carries crude across the Arabian Peninsula to the Red Sea port of Yanbu. Aramco chairman Yasir Al-Rumayyan has described the pipeline this year as the kingdom’s economic “lifeline,” crediting it with successfully rerouting roughly seven million barrels of crude per day since Iran effectively closed the Strait of Hormuz following the US and Israeli strikes. Saudi officials are now working to add between one million and two million additional barrels of daily capacity to the pipeline and are also considering building a smaller, parallel line dedicated to refined petroleum products.

Aramco chief executive Amin Nasser described the broader strategic shift underway at the company last week: “In terms of exporting our crude, we are looking at actively increasing optionality right now.”

Neighboring Countries Join the Effort

The push to diversify extends well beyond the UAE and Saudi Arabia. Kuwait is in talks with Saudi Arabia and other Arab nations to construct a pipeline connecting its oil fields to ports on the Red Sea or in Oman. Iraq and Jordan have revived long-stalled plans for a pipeline capable of carrying up to one million barrels a day to Jordan’s Port of Aqaba on the Red Sea, according to Jordanian state television. Iraq is separately moving to speed up reconstruction of a damaged pipeline connecting its Kirkuk oil fields to Syria’s Mediterranean coast.

New Risks in Rerouting

These workarounds are not without significant complications. Redirecting Saudi exports toward the Red Sea has shifted the security burden to another vulnerable chokepoint, the Bab al-Mandab Strait, where Yemen’s Houthi militia has continued targeting shipping. On Tuesday, six people were killed when Houthi forces struck a vessel in the Red Sea, underscoring that alternative routes carry their own dangers.

Building Insurance Thousands of Miles Away

Beyond new pipelines, Gulf nations are also expanding oil storage capacity in distant markets, including South Korea, Japan and India, effectively pre-positioning supply on the far side of the strait in case it becomes fully inaccessible. “Everybody is trying to add additional storage,” Nasser said, adding that “energy security is becoming a priority now.”

A Chokepoint That Won’t Disappear

Despite the scale of these investments, analysts caution that the Strait of Hormuz will not be eliminated as a transit route entirely, given its existing infrastructure and inherent efficiency advantages. “They definitely need the Strait of Hormuz because it brings them so many advantages and the infrastructure is there,” said Carole Nakhle, chief executive of advisory firm Crystol Energy. She added, however, that “it was foolish for them to put their faith in Hormuz entirely.”

Ben Cahill, an energy analyst at the University of Texas at Austin, said the war has permanently altered how Gulf producers view their exposure to the strait. “A lot of people assume the Strait of Hormuz will never carry the same share of oil exports as it did before the war,” Cahill said. “No country in the world wants to rely as heavily on that transit point again.” He noted that energy producers are now willing to accept greater cost and reduced efficiency in exchange for more secure infrastructure.

A Costly, Multiyear Transition

The projects underway across the Gulf will take years to complete and cost billions of dollars collectively, but governments and companies in the region increasingly view them as necessary insurance against continued volatility. Over time, the shift could also reduce Iran’s regional leverage, which has long been tied in part to its position along the strait — one of the world’s most critical oil transit corridors.