The Pipeline That Swaps One Chokepoint for Another

Goldman Sachs put a number on the Gulf's great infrastructure sprint last week.

That is exactly why the UAE made the decision more than a decade ago to invest in infrastructure that bypasses the Strait of Hormuz — Sultan Al Jaber

The estimate anchors the case that the United States and its Gulf partners are building their way out of Iran's Hormuz leverage: pipelines, tanker transfers, and overland routes that will eventually make the Strait of Hormuz optional. The number is not wrong. It is just answering a narrower question than the label implies. The largest project in the bypass portfolio is the Saudi East-West pipeline, which the kingdom is expanding toward a target of 9 million barrels per day. ^[1] The pipeline runs from the Gulf coast across the Arabian Peninsula to Yanbu, a port on the Red Sea. That route solves Hormuz: oil loaded at Yanbu never enters the Strait of Hormuz. But it does not solve the next strait. From Yanbu, a tanker bound for Asia, which is where most of the oil is going, must sail the length of the Red Sea and exit through the Bab el-Mandeb, the narrow channel between Yemen and Djibouti. The engineering that removes one chokepoint from the route inserts another. The destination makes the geography consequential.

The Middle East conflict is both a stress test of Southeast Asia’s current energy system and a catalyst to accelerate structural change. — International Energy Agency

Asia as a whole is the dominant destination for Gulf oil, which means the Red Sea route is not an edge case. It is the main flow. And Bab el-Mandeb is not a hypothetical vulnerability. The Houthis, Iran's allies in Yemen, have controlled the strait's approaches since they entered the war on March 28, when they struck Israel and simultaneously threatened to close the waterway. ^[2] On April 1, Iran's war plan explicitly included the Bab el-Mandeb as a conditional threat: Tehran signaled it would use Houthi allies to disrupt shipping through the strait if the United States escalated its military intervention. ^[3] By July 15, Iran was calling the two straits something more.

If the current situation aggravates, the Bab el-Mandeb Strait and the Strait of Hormuz will be closed in an operational alliance. — Mohammed Al-Farah

The timing matters here, and it cuts against the cleanest version of the story. The dual-strait concept was embedded in Iran's war plan from the first week: March 28 for the Houthis, April 1 for Tehran's conditional threat. That was well before any bypass pipeline was proposed. The pipelines did not cause the strategy. What they did was give it something it did not have before: a physical target. Before the bypass buildout, Saudi oil had one route out of the Gulf, through Hormuz. Iran could threaten it at the source. Now the same oil is being rerouted overland to a Red Sea terminal whose exit passes through a strait Iran's proxies already menace. The threat was always on paper. The pipeline puts the oil in its path. Not every bypass route creates this problem. The UAE's West-East pipeline terminates at Fujairah on the Gulf of Oman, outside both Hormuz and Bab el-Mandeb. ^[4] Iraq has been exporting oil through Syria to the Mediterranean terminal at Baniyas since April, and through Turkey's Ceyhan port. These routes reach Europe without passing through either strait. ^[5] These projects genuinely remove oil from the chokepoint map. The Saudi East-West pipeline, by contrast, moves oil from one chokepoint to another. And it is the largest expansion in the portfolio. The Goldman Sachs estimate counts the Saudi pipeline as protection. It is, but only against Hormuz. The label "strait-proof" bundles routes that escape both chokepoints with routes that escape only one, and the largest project in the bundle falls into the second category. Hormuz-proof is not strait-proof. The engineering that solves one chokepoint builds the dependency at the next one.