Is Hormuz open? Trump's toll threat intensifies rush to bypass the Strait altogether

• Saudi Arabia is diverting approximately 4 million barrels per day through its East-West pipeline to the Red Sea port of Yanbu, though this route faces risks from potential Houthi attacks at Bab el-Mandeb Strait
• Only Saudi Arabia and the UAE currently have operational crude pipelines bypassing Hormuz with 3.5-5.5 million barrels per day capacity, while Kuwait, Iraq, Qatar, Bahrain and Iran remain heavily dependent on the strait
• Experts estimate it could take 18-24 months to build sufficient alternative infrastructure (pipelines, ports, shipping routes) to meaningfully reduce regional reliance on the Strait of Hormuz

Summary:

U.S.-Iran tensions and President Trump's threat to impose tolls on cargo passing through the Strait of Hormuz have accelerated Gulf nations' efforts to develop alternative oil export routes. The strait, a critical global oil chokepoint, has become increasingly vulnerable to disruptions from attacks and shipping constraints.

Key Developments:

Saudi Arabia is currently diverting approximately 4 million barrels per day through its East-West (Petroline) pipeline system—a 750-mile network with 7 million bpd total capacity—transporting crude from Abqaiq to the Red Sea port of Yanbu. The UAE is reportedly planning to build a new port and container terminal in Fujairah, outside the strait, to reduce dependence on its Jebel Ali hub. Dubai-based DP World is in talks to develop this infrastructure.

Market Implications:

While Saudi Arabia and the UAE possess operational bypass pipelines with estimated capacity of 3.5-5.5 million bpd, other major exporters including Kuwait, Iraq, Qatar, Bahrain, and Iran remain heavily dependent on Hormuz for oil shipments. Alternative routes carry their own risks—tankers using Yanbu must pass through the Red Sea's Bab el-Mandeb Strait, where Houthi attacks threaten another key corridor.

Analysts warn that prolonged disruptions could force Saudi Arabia, Kuwait, and Iraq to reverse recent production increases if storage capacity fills. Building sufficient alternative infrastructure is estimated to take 18-24 months, according to the Peterson Institute for International Economics.

The UAE's faster pivot to alternatives provides greater bargaining power and reduces Iranian regional influence, though the Gulf remains far from eliminating Hormuz dependence entirely.