Recent data reveals that Iraq and the United Arab Emirates, both heavily reliant on Persian Gulf shipping, are accelerating plans to expand oil pipeline infrastructure to address a capacity shortfall created by the potential closure of the Strait of Hormuz.
Last week, the Iraqi cabinet approved measures to expedite crude exports via the Kurdistan-Turkey pipeline network. The current capacity of this pipeline is 220,000 barrels per day, which is set to increase to 770,000 barrels per day following expansion, more than tripling its throughput.
This route traverses the Kurdistan region, connecting to the port of Ceyhan on Turkey's Mediterranean coast, serving as a crucial alternative transport channel. According to World Bank data, the oil sector constitutes 53% of Iraq's real GDP in 2025, underscoring the vital importance of the petroleum economy to the nation. Full operation of this pipeline would significantly alleviate Iraq's economic pressures.
Data from economic intelligence firm QuantCube indicates that, constrained by geography and excessive dependence on the Strait of Hormuz, Iraq's overall export operations have nearly ground to a halt since the onset of conflict.
QuantCube's monitoring metrics track the deadweight tonnage of vessels departing from Iraqi and UAE ports to estimate the weight of cargo being transported.
Alan Lemaignen, a senior economist at QuantCube, stated in an interview that "Iraq's situation is far more complex, as the vast majority—if not all—of its oil exports must transit through the Strait of Hormuz."
Iraq announced at a May 16 press conference that it exported 10 million barrels of oil via the Strait of Hormuz in April, a sharp decline from the pre-conflict figure of 93 million barrels.
Concurrently, Abu Dhabi is fast-tracking the construction of a new east-west pipeline to Fujairah, aiming to boost oil export capacity and bypass the critical maritime chokepoint of the Strait of Hormuz.
This project is slated for completion in 2027 and is expected to double the export capacity of the Abu Dhabi National Oil Company.
On May 15, the Crown Prince of Abu Dhabi called for expediting the pipeline's construction to meet rising global energy demand.
The UAE retains the ability to export oil through other ports, which somewhat mitigates the impact of a Strait of Hormuz closure.
Lemaignen added, "Due to geographical constraints and an inability to reroute, Iraq's position is clearly more difficult than that of the UAE and Saudi Arabia."
"The UAE possesses the port of Fujairah. Even if this port were damaged in a conflict, its existing infrastructure and tanker fleet could theoretically still support large-scale oil exports."
However, existing alternative routes are not without risks. Saudi Arabia's Petroline pipeline was attacked in April, and the port of Fujairah has been targeted multiple times by Iranian drones, forcing temporary halts to loading operations at crude export terminals.
The International Energy Agency notes that the combined capacity of Saudi Arabia's Petroline, which connects Persian Gulf refineries to Red Sea export terminals, and the UAE's pipeline to Fujairah, ranges from approximately 3.5 to 5.5 million barrels per day. Saudi Arabia stated in March that its pipeline's current capacity could reach 7 million barrels per day.
Even if both pipelines operated at full capacity, their combined throughput would still fall far short of the pre-conflict daily flow of about 20 million barrels of oil and petroleum products through the Strait of Hormuz.
Establishing alternative oil export routes requires not only massive infrastructure investment but also significant time. If pipelines cross multiple countries and territories, multinational cooperation agreements are often necessary.
Currently, vessel traffic through the Strait of Hormuz remains well below pre-conflict levels. According to reports, traffic through the waterway in May fell to its lowest point since the current conflict began.
Vessels stranded in the Persian Gulf seeking to transit through designated lanes in the Strait of Hormuz must obtain permission from Iran, otherwise risking attack by Iranian forces. Conversely, complying with Iranian demands could expose these vessels to potential sanctions.
Comments