Saudi Arabia Considers Major Expansion of Red Sea Oil Pipeline to Bypass Hormuz

Saudi Arabia is evaluating a significant expansion of its cross-country crude pipeline to the western Red Sea coast.

The initiative would allow Riyadh and neighboring Gulf producers to route oil exports away from the contested Strait of Hormuz.

The proposed capacity increase targets the East-West pipeline, a critical infrastructure artery constructed in the early 1980s.

Existing infrastructure currently transports up to seven million barrels per day to the port of Yanbu.

State-backed energy company Aramco presently allocates two million bpd to west coast refineries, while the remaining five million bpd are earmarked for international export.

Riyadh has initiated preliminary discussions with neighboring nations regarding an expansion of up to two million bpd.

Sources who spoke to Reuters indicate the project may incorporate a secondary, smaller pipeline dedicated to refined oil products.

Regional Bypass Options

Logistical specifics remain under review. It is not yet determined whether the capacity increase will require entirely new construction or upgrades to current facilities.

Execution of the project would require years of development and billions of dollars in capital expenditure.

It would also necessitate structural adjustments to the pricing mechanisms governing Saudi crude.

The strategic shift follows the outbreak of war with Iran in February, which paralyzed maritime transit through the Strait of Hormuz.

The blockade temporarily forced Gulf producers to shut in up to 12 million bpd, triggering severe price volatility.

While maritime flows have partially resumed following a preliminary agreement between the U.S. and Iran last month, volumes remain depressed compared to pre-war baselines.

Kuwait, Bahrain, and Qatar possess no independent pipeline routes to circumvent the strait.

Iraq’s northern export pipeline to Türkiye continues to operate significantly below maximum capacity amid persistent operational disputes.

Gulf Export Vulnerabilities

The Hormuz closure inflicted substantial damage on regional output. Iraqi production plummeted from 4.3 million bpd to under 1.5 million bpd in May.

Kuwait issued a force majeure declaration in March. Bahrain sustained multiple Iranian missile strikes on its Sitra refining facility.

Kuwait Petroleum Corporation chief executive Sheikh Nawaf al-Sabah confirmed ongoing negotiations with Riyadh and the United Arab Emirates last month.

The talks aim to secure pipeline capacity for Kuwaiti crude shipments.

Qatar heavily relies on liquefied natural gas exports and faces distinct technical barriers to establishing alternative routes.

Doha is exploring multiple export options, including transit through Saudi territory.

Strategic Realignment

Industry analysts note the conflict has accelerated regional efforts to mitigate reliance on the Strait of Hormuz.

The UAE is currently the sole Gulf state holding significant bypass infrastructure. An existing pipeline to Abu Dhabi processes up to 1.8 million bpd.

The UAE is also constructing a new West-East pipeline intended to double crude flows to Fujairah upon its completion next year.

Market observers suggest the proposed Saudi expansion could trigger heightened production competition between Riyadh and Abu Dhabi once hostilities conclude, potentially driving down prices.