Persian Gulf states are accelerating billions of dollars in investment in ports, pipelines and railways to reduce their dependence on the Strait of Hormuz after months of disruption during the Iran war, Reuters reported Friday.
Trade is increasingly being redirected toward Saudi Arabia’s Red Sea ports and the UAE’s eastern coast, while governments are looking for permanent alternatives to the strategic waterway.
Ports have become a “mission-critical priority” for governments in the region, one industry source told Reuters. Describing the shift in Saudi investment priorities, the source said the focus for the next year or two would be “ports, ports, ports.”
Saudi Arabia has fast-tracked plans to expand its crude pipeline to the Red Sea, potentially allowing more oil to move without crossing Hormuz.
The UAE is building a pipeline that will double crude capacity to Fujairah next year, while DP World plans two new container terminals there.
Kuwait is discussing access to Saudi and Emirati pipeline networks for its oil shipments. Iraq is also pursuing additional export routes through Turkey, Syria and Jordan.
The disruption has exposed the vulnerability of economies dependent on Hormuz. Qatar is particularly exposed because its LNG exports relied entirely on the strait before the war, while shipping, aviation, tourism and industrial activity across the region have also suffered.
“The recent Strait of Hormuz crisis has given us a very important lesson that these vulnerabilities are real,” former Atlantic Council fellow Afaq Hussain told Reuters.
The infrastructure drive could ultimately cost hundreds of billions of dollars.
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