Iraq and the United Arab Emirates are accelerating plans to expand oil pipeline capacity to offset the loss of shipping routes caused by a closure of the Strait of Hormuz.
Recent data highlights both nations' extreme dependence on the Persian Gulf for their exports.
Last week, the Iraqi cabinet approved a plan to expedite crude exports via the Kurdistan-Turkey pipeline network.
This initiative aims to more than triple the existing capacity from 220,000 barrels per day to 770,000 barrels daily.
This route offers an alternative path through Kurdistan to the Turkish Mediterranean port of Ceyhan.
According to World Bank figures, oil contributes 53% to Iraq's real GDP in 2025.
Operating at full capacity, this pipeline should provide relief for this oil-dependent economy.
Exclusive data provided to CNBC by economic intelligence provider QuantCube Technology shows that Iraq's overall exports have nearly completely halted since the outbreak of conflict, due to its geographical reliance on the Strait of Hormuz.
QuantCube senior economist Alan Lemangnan stated that Iraq's situation is far more complex, as it is well-known that the vast majority, if not all, of its oil transits through the Strait of Hormuz.
At a press conference on May 16th, Iraq announced that oil exports via the Strait of Hormuz in April were 10 million barrels, significantly lower than the pre-conflict level of 93 million barrels.
Concurrently, Abu Dhabi is pushing forward with the construction of a new east-west pipeline to Fujairah, similarly aimed at boosting oil export capacity and bypassing the critical chokepoint of the Strait of Hormuz.
The project, expected to be operational by 2027, will double the export capacity of the Abu Dhabi National Oil Company.
On May 15th, Abu Dhabi Crown Prince Sheikh Khaled bin Mohamed bin Zayed Al Nahyan called for an acceleration of the pipeline construction to meet growing global energy demand.
The UAE can still export oil via other terminals, which somewhat mitigates the impact of the Strait's closure.
Lemangnan added that clearly, due to geographical constraints and an inability to reroute, Iraq's situation is much more complicated than that of the UAE or Saudi Arabia.
The UAE still has the Fujairah terminal; even if it were damaged in a conflict, it theoretically retains the infrastructure and tankers to export significant volumes of oil.
However, even existing alternative routes face risks.
Saudi Arabia's east-west pipeline was attacked by Iran in April, and Fujairah also came under attack by Iranian drones, disrupting loading operations at its crude export terminal.
The International Energy Agency notes that Saudi Arabia's east-west pipeline, connecting processing facilities near the Persian Gulf to export hubs on the Red Sea, along with the UAE's pipeline to Fujairah port, have a combined available capacity of approximately 3.5 to 5.5 million barrels per day.
This is far below the pre-conflict shipping volume of about 20 million barrels per day of oil and petroleum products through the Strait of Hormuz.
Developing alternative export routes requires not only massive infrastructure investment but also time.
If pipelines cross multiple territories, they often require international agreements.
Current vessel traffic through the Strait of Hormuz remains well below pre-war levels.
Ships trapped in the Persian Gulf face the risk of attack by Iranian forces unless they obtain Tehran's permission to transit the Strait of Hormuz via designated routes.
Simultaneously, cooperation with Iran could also risk facing sanctions from the United States.
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