Without Nuclear Bombs, Iran Has a Weapon That Makes the World Anxious

The Strait of Hormuz has transformed from a trade route into Iran’s economic weapon. Its narrow location and Tehran’s surrounding military strength allow it to disrupt energy shipments and pressure neighbouring countries. Approximately one-fifth of the world’s oil and liquefied natural gas (LNG) passes through the strait. When shipping is disrupted, energy supplies stall, transport and insurance costs rise, and global oil and gas prices are pushed upwards. Five months into the conflict, questions arise about how long Iran can maintain this power. Gulf states have begun building and maximising alternative export routes, but analysis from the Hormuz Dependency Dashboard, cited by The Economist, shows that dependence on the strait cannot be eliminated quickly. Crude oil is relatively easy to divert via pipelines. However, petrol, diesel, LNG, food, and containerised goods are much harder to reroute. Iran’s influence over global energy prices may diminish towards the end of the decade, but its leverage over Gulf states could last much longer.

Before the war, around 16 million barrels of crude oil passed through the Strait of Hormuz daily. Of all the commodities traversing the waterway, crude oil has the most alternative route options. Saudi Arabia has maximised the East-West pipeline, which connects eastern production areas to the Yanbu port on the Red Sea, increasing its flow from about 1 million to its full capacity of 7 million barrels per day. However, only nearly 5 million barrels per day can be directly exported; the rest supplies Red Sea refineries. The UAE has also increased the flow of its Habshan-Fujairah pipeline from around 1 million to 1.8 million barrels per day, ending at Fujairah outside the Strait of Hormuz. Meanwhile, about 200,000 barrels of Iraqi oil per day are now being sent to Turkey via a previously unused pipeline network. Despite maximising these routes, The Economist estimates that around 10 million barrels per day still lack an alternative export path. Gulf states are therefore accelerating new network construction. The UAE plans an additional pipeline with a capacity of 1.8 million barrels per day, targeted for completion by the end of 2027. Iraq aims to increase one pipeline’s capacity to 1 million barrels per day within a year and plans a new 2.5 million barrel per day pipeline connecting southern oil fields to routes towards Jordan, Syria, and Turkey. If all projects proceed as planned, an additional 5 million barrels per day could bypass Hormuz by 2030, but another 5 million barrels per day would still lack an alternative route.

Building pipelines does not automatically make energy exports safer. Iraq’s projects still face security risks, cross-border disputes, and construction delays. Saudi oil shipped from Yanbu to Asia must pass through the Bab al-Mandab strait, a narrow passage near Yemen within range of Iran-allied Houthi forces. The diversion of oil from Hormuz has actually sharply increased the use of Bab al-Mandab, with Saudi crude exports through the strait surging after the East-West pipeline was maximised. Another option is moving Saudi oil north via the Suez Canal or Egypt’s Sumed pipeline network, but this route is also not entirely safe. On 29 July 2026, a drone struck a tanker at Damietta, a port near the Suez Canal. Iran or its allied groups could also attack pipelines, ports, and new facilities that reduce Hormuz’s importance. Such threats could keep construction, funding, and insurance costs high even if the war ends through negotiation. Ultimately, Gulf states are not eliminating risk; they are merely shifting some shipments from one vulnerable chokepoint to another.

While crude oil is finding options, the situation is different for refined petroleum products. Gulf states shipped nearly 5 million barrels of petrol, diesel, and other fuels through Hormuz last year. No overland pipeline network currently exists to replace this route. Saudi Arabia plans a 2 million barrel per day expansion of the East-West corridor for refined products, but the project is in its early stages and requires the expansion of Yanbu port. Iraq is attempting to use road transport, sending fuel oil to Syria via around 1,000 trucks per day, a sharp increase from just 10 trucks before the war, but this method is far slower and more expensive than shipping. The most complex issue lies with LNG, which is predominantly exported by Qatar. The country is almost entirely dependent on Hormuz and currently has no alternative export route project. Qatar could theoretically build a gas pipeline to Oman, but the required capacity would be equivalent to the Nord Stream network that once carried Russian gas to Europe. Building a pipeline alone is insufficient; Qatar would also need to construct a gas liquefaction complex on the Arabian Sea coast so LNG can be loaded onto ships without passing through Hormuz. Such a project would be enormously expensive and take many years to complete. Importing countries can seek supplies from other regions, and high energy prices are expected to encourage additional oil production.