Washington, Allies Build 50% Hormuz Bypass as Iran Blockade Exposed 20 million bpd Risk
Updated
Updated · OilPrice.com · Jul 6
Washington, Allies Build 50% Hormuz Bypass as Iran Blockade Exposed 20 million bpd Risk
3 articles · Updated · OilPrice.com · Jul 6
Summary
Washington and its allies are shifting from emergency shipping fixes to a permanent network meant to reroute up to half of the 20-21 million bpd that normally crosses the Strait of Hormuz.
A 28 February Iranian blockade halted traffic through the chokepoint and drove oil prices up more than 70%, exposing how limited stopgap routes were in replacing normal flows.
Existing alternatives have helped only partially: Saudi Arabia lifted East-West pipeline capacity to 7 million bpd but can export about 4.5 million bpd from Yanbu, while the UAE maxed out its Fujairah line at 1.8 million bpd.
New projects are being accelerated, including a second UAE pipeline to push Fujairah bypass capacity above 3 million bpd by 2027, Iraq's Basra-Haditha line at 2.25-2.5 million bpd, and revived Iraq-Syria and Turkey export routes.
IMEC has become the strategic centerpiece, with a wartime redesign shifting its eastern leg to Oman so cargo can avoid Hormuz entirely, part of a broader effort to permanently weaken Iran's leverage over global energy and trade.
Are rival Mideast trade routes making the US-backed India-Europe economic corridor obsolete before it is even built?
Did Iran's blockade accidentally accelerate China's rise as the new leader of the global energy system?
2026 Hormuz Blockade: How the World Is Rewiring Oil Routes and Accelerating the Energy Transition
Overview
The 2026 crisis in the Strait of Hormuz, where Iran blocked the vital waterway for over a month, triggered a global scramble to find alternative oil and trade routes. This disruption severely hurt the world economy and forced Gulf states and their partners to act quickly. Most ships were banned from the Strait, making it clear that relying on this single chokepoint was too risky. As a result, countries began investing heavily in new pipeline networks, like Saudi Arabia’s East-West Pipeline, to secure energy supplies and reduce future vulnerabilities. The crisis highlighted the urgent need for resilient infrastructure and strategic planning.