Why Gulf bypass routes offer only weeks of oil supply cover

The effective closure of the Strait of Hormuz has exposed a critical vulnerability in global energy security. Despite years of strategic investment in overland pipeline networks designed to circumvent the maritime chokepoint, major Gulf producers face a rapid depletion of storage capacity that could force severe production cuts within weeks.

While regional governments have championed an array of bypass routes, analysts warn the mathematical reality falls short of the theoretical promise. Alexandre Araman, research director at Wood Mackenzie, wrote on LinkedIn: “Hormuz closure: who can bypass it – and for how long?”

Araman noted that the strait facilitates around 15% of global oil supply and 20% of global liquefied natural gas trade. Excluding Iran, roughly 15mn barrels per day (bpd) of Gulf crude and products are now exposed. “The issue is not production. It is evacuation,” he wrote.

Saudi Arabia possesses the greatest logistical flexibility. The kingdom exports around 7mn bpd, traditionally routing 6mn bpd through the Gulf and 1mn bpd via the Red Sea. Its primary contingency relies on the East-West Pipeline, which stretches 1,200 km from the Abqaiq processing hub to Yanbu on the Red Sea coast. Araman wrote that the 5mn bpd pipeline offers “~2mn bpd spare capacity that could be redirected westward.”

However, he cautioned that even with this diversion, roughly 4mn bpd of Saudi exports would remain trapped. While massive domestic and overseas storage capacity buys time, Araman said that “under a sustained disruption, tanks would fill quickly. The Kingdom could likely manage for around a month. Two months would be much harder.”

Other major producers face significantly shorter timelines. Kuwait lacks any bypass infrastructure, meaning all its exports must transit Hormuz. With limited storage headroom, Wood Mackenzie estimates the country has roughly two weeks of cover before it must slash production. Southern Iraq is similarly exposed; its 3.5mn bpd of exports are entirely dependent on the strait, with storage cover measured in “days, not weeks,” according to Araman.

The UAE maintains partial flexibility through the Abu Dhabi Crude Oil Pipeline (ADCOP), which can move 1.8mn bpd to Fujairah, a terminal located outside the strait. Nevertheless, with total exports exceeding 3.4mn bpd, a substantial volume remains bottlenecked. Araman wrote that ADNOC’s Fujairah storage provides a buffer of roughly two to three weeks, after which Murban crude output must adjust.

A June research note by consultancy IGM Energy highlighted how years of strategic investment have created a partial insurance policy against the strait’s closure. For example, a recent $250mn upgrade boosted the Saudi pipeline capacity to 7mn bpd. Yet, IGM calculated that while regional networks represent a theoretical bypass capacity exceeding 12mn bpd, only about 5mn bpd is actually operational today.

Furthermore, alternative terminals are not immune to the widening conflict. Referring to recent attacks, Araman wrote: “Today’s drone incident underline a broader reality: regional infrastructure is within reach.”