With the Iran conflict flaring up once again with no end in sight, the Gulf states are contemplating how to avoid dependence on the Strait of Hormuz. There is no easy — and in some cases, no viable — answer. The existing bypass infrastructure addresses only a fraction of the exposure. Expanding the bypass capacity would take the better part of a decade, cost hundreds of billions of dollars, replace dependence on Iranian goodwill with that of Saudi Arabia, and be unable to offset issues beyond crude oil exports.
Consider a country-by-country assessment.
Saudi Arabia
Saudi Arabia is the Gulf's bypass success story — and even here the picture is nuanced. To hedge against the closure of the Strait, the Saudis built the East-West Pipeline — known as the Petroline — running west to the Red Sea port of Yanbu, carrying up to 7 million barrels of crude per day. The Petroline is exclusively Saudi — no other country uses it, although Riyadh is in early talks with Kuwait, Bahrain, and Qatar about possible future access.
The Petroline helps, but does not fully offset, dependence on Hormuz. Yanbu exports a maximum of 4.5 million barrels per day of crude oil only, compared to pre-war crude exports of approximately 7.3 million barrels per day. Nor does it provide an exit for Saudi exports of refined products and LPG of nearly 2 million barrels per day before the war. The Petroline sustains Saudi oil liquids exports at roughly half its pre-war volume.
A full bypass covering all Saudi export streams would require three to four dedicated pipelines plus Yanbu port expansion at a total cost of $30-50 billion and requiring 5-7 years under normal circumstances. Such infrastructure remains vulnerable to Iranian interdiction. Iran struck a Petroline pumping station in April, knocking 700,000 barrels per day offline, and could do so again. Further, Saudi exports to Asia must cross the Bab el-Mandeb strait between Yemen and Djibouti. As of July 20th, the Houthis declared a complete naval blockade of Saudi Arabia in the Red Sea. Commercial vessels are already rerouting around the strait. Saudi Arabia's Petroline bypass, designed to avoid Hormuz, now terminates at a strait Iran's proxies have formally declared closed. Even the Saudi bypass is not guaranteed.
UAE
No country has been more affected by the war than the UAE. Iran fired more than 1,800 missiles and drones at the UAE — more than at any other country — striking oil facilities, airports, and port infrastructure. The UAE's bypass pipeline — ADCOP — carries 1.8 million barrels of Abu Dhabi crude per day past the Strait to Fujairah on the Gulf of Oman. Iran has struck Fujairah repeatedly during the conflict. The port remains well within Iranian striking distance and will not prove a reliable bypass regardless of its nominal capacity.
And it is more than just oil. Dubai's Jebel Ali port and free zone handles 15.5 million containers per year, contributing 36 percent of Dubai's GDP in economic value added. Every container transits Hormuz. There is no bypass pipeline for containers.
Further, Emirates airline depends on Dubai being among the world's safest and most connected hubs. Dubai's 17 million annual tourists will go elsewhere if they feel in danger. The desirability of Emirates' real estate to buyers will collapse and with it, construction. The country's financial firms may also relocate to more stable venues. For the UAE, the cost of perpetual Iranian hostility is not measured only in pipeline capacity. Almost the entire economy is at risk, and given that 90 percent of the population is expatriate, the Emirates will simply depopulate if the Strait is closed. The UAE that we have known for the last decades will cease to exist.
Iraq
Iraq’s pre-war crude exports of over four million barrels per day went almost entirely through Basra and Hormuz. Output collapsed by 80 percent in March 2026 and has only partially recovered. Iraq loses approximately $200 million per day while the strait remains closed.
Three bypass alternatives exist: north through Sunni Anbar and Kurdish territory to Turkey's Mediterranean coast; west through the long-defunct IPSA pipeline to Saudi Arabia's Yanbu; or the Kirkuk-Baniyas pipeline to Syria's Mediterranean coast, being promoted by the US with Chevron and TotalEnergies in early discussions. The northern route requires completing the Basra-Haditha pipeline — 685 kilometers through Anbar, with $4.6 billion approved and three to five years from meaningful flows. The western route through Syria requires rehabilitating a pipeline shut for 36 years. None covers more than a fraction of pre-war export volume on any near-term timeline.
Iraq faces not only cost and logistics challenges but political forces likely to stymie any escape route through maneuvering or outright violence. Every northern route requires managing Sunni tribal politics, Kurdish autonomy disputes, and a Baghdad-Ankara treaty expiring this month with renewal uncertain. The western route requires the Shia-majority government to sign a strategic agreement with Sunni Saudi Arabia — giving Riyadh leverage that competes directly with Iranian influence. Iran has enough proxy militia presence to make any Iraqi pipeline uninsurable and enough parliamentary influence to block a Saudi agreement before it is signed.
The human cost compounds the economic: Iraq imports 80 percent of its food through Gulf ports, and 90 percent of the Iraqi government budget comes from oil revenues. Without it, Iraq becomes a failed state fully under Tehran's control. The US withdrawal announced July 15th — ending a 23-year military presence — removes the last external counterweight to Iranian influence and delivers Iraqi sovereignty into Iranian hands if the Strait remains closed.
Kuwait
Kuwait exported roughly 2.5 million barrels per day before the war through a single route — Hormuz. With the closure of the Strait, seaborne exports have effectively ceased. Two bypass directions exist: north through Iraqi territory, facing the same political obstacles that confront Iraq itself and worse given Kuwait's limited leverage with Baghdad; or south through Saudi Arabia via a new pipeline connection to the Petroline. Saudi Arabia is in preliminary discussions to accommodate Kuwaiti barrels. Nevertheless, expansion would take years, cost billions, require changes to Saudi crude pricing, and place Kuwait's export lifeline under Saudi operational control.
Whether Iran would permit Kuwait to develop an alternative export route through Saudi Arabia is another matter entirely. Tehran has both the motive and the demonstrated willingness to strike Kuwaiti infrastructure, and a Kuwait that can bypass Hormuz is a Kuwait that escapes Iranian leverage. Kuwait has some hope of finding an exit through Saudi Arabia — but it will require time, money, and an existential dependence on Riyadh that Kuwait may find hard to swallow. Iran may be expected to do everything possible to hold Kuwait hostage and destroy or defeat any initiative to complete a bypass.
Qatar
Qatar's vulnerability is not oil — it is 77 million tonnes per year of liquefied natural gas from Ras Laffan, representing roughly one fifth of all LNG traded globally. LNG and associated gas production represent roughly two-thirds of Qatar's GDP and 85 percent of export earnings. Every molecule transits Hormuz. Both theoretical bypass options — overland through Oman to the Indian Ocean coast, or through Saudi Arabia to the Red Sea — require new liquefaction capacity of 65 million tonnes per year at a cost of $150 billion or more and fifteen to twenty years of construction. As a result, Qatar's LNG cannot be meaningfully rerouted within any timeline relevant to current geopolitics. A closed Hormuz is not a disruption to Qatar's economy. It is the destruction of Qatar's economy.
Bahrain
Bahrain presents a paradox. Its oil bypass problem is the most manageable — 200,000 barrels per day, already partially integrated into Saudi infrastructure through the shared Abu Saafa field. On oil, Bahrain is the easiest problem at the table.
Everything else is more complicated. Bahrain is the most economically diversified Gulf state — oil is only 14 percent of GDP — but that diversification has produced a cluster of large, fixed, maritime-dependent industrial facilities at Sitra that Iran has already demonstrated it can strike at will. ALBA, the world's largest single-site aluminum smelter at $4.4 billion in revenue, requires alumina by ship and port access for 1.6 million tonnes of metal exports. BAPCO's newly modernized 380,000 barrel per day refinery requires crude input and product export by ship. GPIC's petrochemical exports and ASRY's ship repair business are both functionally closed when Hormuz is closed. Iran struck Sitra repeatedly during the conflict.
Tourism — 11 percent of GDP — is paradoxically the most resilient. The overwhelming majority of Bahrain's 8.3 million annual visitors drive across the King Fahd Causeway from Saudi Arabia seeking relief from conservative Saudi social norms at home. Bahrain offers alcohol, nightlife, and mixed-gender entertainment. If the causeway stays open, the tourists will keep coming.
Bahrain can probably weather the impact of a permanent closure of the Strait at an immediate and lasting cost of 15 percent of its GDP.
The Real Calculus
The degree of Hormuz exposure varies considerably across the Gulf. For Qatar, Iraq, and the UAE, it is existential. Up to 90 percent of government revenue depends on Hormuz access with no viable bypass alternatives. For Saudi Arabia and Bahrain, it is painful but more manageable. Kuwait sits between, financially cushioned but logistically trapped.
The bypass options are expensive, slow, and incomplete. A Gulf-wide crude bypass program would take a decade and cost well over $100 billion. Products pipelines are technically buildable but require separate dedicated infrastructure — different steel specifications, pressure controls, and multiple lines for different grades — adding further cost and years to an already lengthy program. LNG has no pipeline solution at any price on any relevant timeline. Nor does any bypass solve the Saudi dependency problem. Every meaningful overland route runs through Saudi territory — and Saudi Arabia itself is not immune. The Petroline has already been struck, and its Yanbu terminals face Houthi missiles at Bab el-Mandeb today.
Finally, it is not only energy at stake. Container shipping, manufacturing, logistics, tourism, and real estate are all under actual or potential threat in ways that no pipeline addresses. The economic cost of permanent Iranian hostility extends far beyond the barrel price into every sector that depends on the Gulf being safe, connected, and insurable.
Can the Gulf states avoid the Strait of Hormuz? In the best case, partial displacement is possible over the next half decade. But for some countries and some industries, the Strait is the only exit from the Gulf. Qatar's LNG will transit Hormuz or it will not be exported. Iraq's southern fields will ship through Basra or not at all. Dubai's containers will pass through the strait or go to another hub. For those who believe the Strait can easily be bypassed, forget it. While a partial workaround is possible for some countries, the Gulf states will be reduced to a shadow of their former glory if the Strait remains closed.
Steven Kopits is Managing Director of Princeton Policy Advisors.