Middle East Expands Pipelines After Hormuz Closure Paralyzed 20% of Global LNG and Crude Flows
Updated
Updated · OilPrice.com · Jun 21
Middle East Expands Pipelines After Hormuz Closure Paralyzed 20% of Global LNG and Crude Flows
3 articles · Updated · OilPrice.com · Jun 21
Summary
Saudi Arabia rerouted about 7 million barrels a day through its East-West pipeline to the Red Sea after Iran closed the Strait of Hormuz, exposing Yanbu port loading capacity as the main bottleneck.
The disruption pushed other exporters to accelerate bypass projects: the UAE plans a new line to double Fujairah-bound capacity to 3.6 million bpd by end-2027, while Iraq wants to lift Kirkuk-Ceyhan capacity to 770,000 bpd within months.
Iraq was hit especially hard because more than 90% of its oil exports normally move through the Gulf; exports from roughly 3.3 million bpd collapsed to a fraction of that, and production fell from above 4 million to just over 1 million bpd.
Longer term, regional planners are reviving Mediterranean export routes through Syria, Jordan and Turkey, including a proposed $10 billion Four Seas network aimed at turning the Levant into an energy corridor.
Kuwait and Qatar remain more exposed because they lack domestic bypass infrastructure and would need neighbors' pipelines, even as the immediate risk of another Hormuz shutdown is seen as low unless hostilities resume.
Beyond oil, how is the Hormuz blockade crippling the world's supply of fertilizers and other critical goods?
Will new Mideast pipelines bring energy security or just move the battlefield from the sea to Syria?
Is this pipeline boom a last bet on oil, ignoring the accelerating global shift to green energy?
The 2026 Strait of Hormuz Crisis: Unprecedented Oil Shock, Global Economic Fallout, and the Race for Energy Resilience
Overview
The global crisis began when the United States and Israel launched a coordinated attack that killed Iran’s supreme leader and top officials. In response, Iran immediately retaliated by closing the Strait of Hormuz, a key route for global oil shipments, and taking further unspecified actions. This closure triggered a major energy shock, causing energy, transport, and food prices to surge worldwide. The resulting cost increases have put heavy pressure on public finances and household budgets, especially in developing countries. The crisis has disrupted supply chains and continues to create significant economic challenges across the globe.