Reports indicate Gulf states are considering building new oil pipelines to bypass the Strait of Hormuz. How feasible is this? Can it resolve the global energy crisis in the short term?

The option of exporting oil via Israel would be rejected first—after all, Gulf states are virtually mortal enemies of Israel; they would rather compromise with Iran than with Israel, so this option is certainly ruled out immediately. The route from Iraq through Syria and then out to sea via Lebanon is also unviable: Lebanon itself is a deeply fragmented state, plagued for years by civil war or constant conflict with Israel. Transit through Lebanon would entangle too many competing actors, making coordination of interests among them extremely difficult. The route from Iraq through Turkey faces its biggest obstacle in Turkey itself. Erdogan’s ambitions are enormous—he already dares to position himself as an equal to both the U.S. and Russia. If Persian Gulf oil were to flow through Turkish territory, Erdogan would effectively assert dominance over both Putin and Trump. Exporting oil via Turkey would thus offend far too many parties. Finally, Oman appears to be the only remaining option—but Oman is, by nature, a neutral country. Its very survival depends on refusing to take sides. Allowing a pipeline to cross its territory would force Oman to choose a camp, instantly destroying its credibility across the Middle East. It would likely reject the proposal outright—even before construction begins. Even if geographical routing challenges could somehow be resolved, two further major hurdles remain: transit fees and maintenance costs. Iran has announced plans to levy transit fees on vessels passing through the Strait of Hormuz; similarly, any newly built pipeline’s export terminal would inevitably impose transit fees. These two charges are essentially the same thing—for Gulf states, both amount to tribute paid to a regional hegemon. This would spur each Gulf state to assert greater sovereignty, making consensus among them highly unlikely. Maintenance costs pose an even thornier problem: the pipeline must be built with excess capacity to serve as a viable alternative during emergencies. Yet excess capacity means the pipeline would sit idle during normal times—generating no revenue while still incurring substantial maintenance expenses.

Iran proposes charging 5%–7% transit fees at the Strait of Hormuz; Oman proposes 3%; the U.S. refuses to charge any fee. What will the final outcome of this geopolitical博弈 be? What are the positions of the Arab League and the Gulf Cooperation Council?

Oman—a country that hides behind Iran while trying to profit from the situation—is adept at maneuvering between the U.S. and Iran, and is quietly quite cunning. Its oil reserves are smaller than those of other GCC members, and its economic structure remains relatively underdeveloped. Oman thus sees the Strait of Hormuz transit-fee business as a golden opportunity to boost revenues. Recently, due to the Strait’s partial closure, Gulf states have had no choice but to reroute exports through Oman’s Port of Mina al-Fahal—bringing Oman considerable benefits. Annual cargo value transiting the Strait of Hormuz—including crude oil, refined petroleum products, LNG, chemical goods, food, and general cargo traded by Gulf states—totals approximately $75 billion. A 5–7% transit fee would yield Iran $3.75–5.25 billion annually in strait tolls. For context: Iran’s total annual fiscal revenue stands at roughly $9.85 billion, of which $3.24 billion comes from oil and gas. Thus, this proposed ‘strait transit fee’ would account for 38–53% of Iran’s entire national budget—and would exceed its annual oil-and-gas revenue, potentially becoming Iran’s single largest source of tax revenue. By contrast, Egypt levies only 0.4–0.45% on cargo value for passage through the Suez Canal, generating just $4.7 billion annually. Given that the world’s most critical maritime chokepoint charges a rate far lower than Iran’s proposed fee, I remain highly skeptical about the feasibility of Iran’s final transit-fee scheme. That said, Iran does possess unique advantages over Egypt: First, it possesses large arsenals of short-range missiles, anti-ship missiles, suicide drones, suicide unmanned underwater vehicles, and naval mines—capable of striking tankers and bulk carriers from Gulf states and Western nations even under U.S. Navy escort operations. Second, the Strait of Hormuz is the economic lifeline for Gulf states including the UAE, Kuwait, Qatar, and Bahrain—and is vital to global energy security. Approximately 34% of the world’s crude oil (including condensates), 19% of LNG, 35% of helium, and 30% of fertilizer trade pass through this narrow waterway. Crucially, for Persian Gulf littoral states, there is simply no viable alternative maritime route.

Oman to Boost Oil Storage as Gulf Nations Seek to Bypass Hormuz

21 hours ago

Oman's OQ SAOC plans to double oil storage at Duqm port via onshore expansion and supertanker leases, aiding Gulf nations bypass the contested Strait of Hormuz amid regional conflicts.

bloomberg

2026-09-29

Oman to Boost Oil Storage as Gulf Nations Seek to Bypass Hormuz

Oman to Boost Oil Storage as Gulf Nations Seek to Bypass Hormuz

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