More than just a sensitive waterway, the Strait of Hormuz has become a test in recent weeks of the Gulf’s economic model. For decades, Gulf oil and gas have flowed through the strait on their way to world export markets, the region’s energy industry always assuming that this vital artery would remain open regardless of any geopolitical tensions. As has been seen since March, however, that assumption now seems misplaced.
As a result, states are looking for workable alternatives, even if those alternatives are partial, costly, or temporary. At the heart of those ideas is Saudi Arabia. It is the region’s largest oil exporter, and its landmass stretches from the Gulf to the Red Sea. It is capable, both in theory and in practice, of redirecting energy flows away from maritime chokepoints. The question now, therefore, is not just how Saudi Arabia can protect its own exports, but how it might become a platform for reshaping the Gulf’s trade and energy routes.
Historic precedent
This idea is not new. Almost 80 years ago, construction began on the Trans-Arabian Pipeline (known as Tapline), stretching from Saudi Arabia’s east coast to Lebanon’s Mediterranean city of Sidon. Completed in 1950, the aim was to carry Saudi oil overland to Europe, bypassing the Gulf altogether. It established the principle that maritime geography can be bypassed through Saudi geography.
In 1980, with the outbreak of the Iran-Iraq War, that principle became a necessity. The ‘tanker war’ attacks of the 1980s pushed Riyadh to build the East-West Pipeline, carrying oil from the eastern fields to the port of Yanbu on the Red Sea. It was the first practical response to the possibility of the Gulf being choked off, and the first successful model for moving energy away from Hormuz.
In the late 1980s, Iraq sought to use Saudi territory as an alternative route, building the IPSA (Iraqi Pipeline in Saudi Arabia) from Basra in Iraq to the Red Sea. For a brief period, it seemed that there was a move towards a broader, regional model of energy transit, but Iraqi President Saddam Hussein’s 1990 invasion of Kuwait brought that project to a halt, and the pipeline was mothballed.
In the years that followed, the idea remained in the background, but never developed into an integrated system. Projects such as the 25km King Fahd Causeway (a series of bridges and embankments), completed in 1986, link Bahrain to Saudi Arabia, giving it a single overland outlet. Likewise, the Gulf railway project, announced in 2009, sought to connect all Gulf Cooperation Council states via a land transport network to reduce dependence on sea transport.
Adding urgency
These projects, for all their importance, were not built under the pressure of an existential crisis. Instead, they were based on the logic of gradual economic integration, resulting in uneven and slow implementation. Today, the context has changed. A closed Strait of Hormuz is reviving alternative thinking. The aim now is for the survival of an industry, not integration in the name of efficiency.
Gulf states are not trying to replace the Strait, which would be unrealistic in the short term. The aim, instead, is to reduce its centrality to the point where its disruption no longer becomes catastrophic. Saudi Arabia has stepped up its use of the East-West Pipeline, moving oil towards the Red Sea, while shipping companies have begun turning to land bridge solutions, with containers transported from Gulf ports to Red Sea ports via road or rail. This is costly and complex, but it carries a deeper significance: trade has already begun, however partially, to move beyond its traditional route.
