Iraq and Syria signed a cooperation agreement on July 17 to rehabilitate and reconstruct the Kirkuk-Baniyas crude oil pipeline, a Mediterranean export route that has sat dormant for decades. The signing took place in Washington on the sidelines of a US-Iraq business summit, during Iraqi Prime Minister Ali al-Zaidi’s visit to the United States, which also included a stop in Houston for meetings with major energy firms.

Basra Oil Company CEO Bassam Abdul Karim Nasr signed on behalf of Iraq, and Syrian Petroleum Company CEO Yousef Kabali signed for Syria. US Energy Secretary Chris Wright attended the ceremony, and the State Department framed the pipeline as a strategic infrastructure project to be executed by a US-led international consortium.

The February blockade of the Strait of Hormuz left a lasting impression on Washington, and the response now taking shape is not a short-term fix but a structural one. Tehran’s decision to shut the chokepoint at the outset of the joint U.S./Israeli operation sent oil prices spiking more than 70 percent almost overnight, a shock severe enough that the prospect of the blockade dragging into the November midterms became a central factor pushing Trump toward a ceasefire. Having lived through that scenario once, the U.S. and its allies are now working to make sure Iran’s most potent card loses most of its value.

Saudi Arabia has restored full pumping capacity on the East-West pipeline — also known as the Petroline — returning throughput to 7 million barrels per day following Iranian drone strikes that knocked out one of its eleven pumping stations in early April. The restoration was confirmed by the kingdom’s Ministry of Energy and represents the completion of a contingency plan decades in the making.

The pipeline was built during the Iran-Iraq War in the 1980s, designed precisely for this scenario: a hostile power threatening the Strait of Hormuz. Running 1,200 kilometers across the Arabian Peninsula from the Abqaiq processing hub in the Eastern Province to the Red Sea port of Yanbu, it moves Saudi crude entirely overland, rendering the strait irrelevant to the kingdom’s export capacity. In 2026, accompanying natural gas liquids pipelines were converted to carry crude oil, raising total capacity from 5 million to 7 million barrels per day.

When the United Arab Emirates announced its departure from OPEC, most commentary focused on the diplomatic rupture — the end of a decades-long alliance, the tension with Riyadh, the signal it sent about the cohesion of the Gulf producer bloc. But the more consequential story is infrastructural. The UAE already has a pipeline that changes everything.

The Habshan-Fujairah Pipeline: Built for Exactly This Moment

The Abu Dhabi Crude Oil Pipeline — running 400 kilometers from the onshore Habshan oil fields to the deepwater export terminal at Fujairah on the Gulf of Oman — was completed in 2012 and was always understood as a strategic hedge against Hormuz closure. It has a nameplate capacity of approximately 1.5 million barrels per day, with expansion potential that Abu Dhabi National Oil Company (ADNOC) has publicly targeted at 1.8 to 2 million barrels per day.

The Strait of Hormuz is irreplaceable for Iran. It is increasingly optional for everyone else. Two decades of Gulf state infrastructure investment have built a parallel export system that bypasses the corridor entirely, and the trend is accelerating. The strategic implication is that Iran’s chokepoint leverage is depreciating in real time.

Saudi Arabia’s East-West pipeline, the Petroline, runs from Abqaiq to Yanbu on the Red Sea. Capacity has been expanded incrementally and now sits near five million barrels per day. In a Hormuz disruption scenario, the Saudis can route the bulk of their crude to a Red Sea terminal that exits via Bab el-Mandeb, a strait the Houthis can harass but the kingdom can defend more easily than a Gulf corridor ringed by Iranian territory. Yanbu is not a perfect substitute. It is a serviceable one.

Saudi Aramco processes more oil through fewer facilities than any other company on earth. The Abqaiq oil processing facility in the Eastern Province handles a majority of Saudi crude production, stabilizing and processing it before it moves to export terminals. Ras Tanura is the largest oil loading port in the world. These facilities — concentrated, critical, and heavily defended — represent the upstream end of a supply chain whose downstream end runs through Hormuz. An attack on Abqaiq or a closure of the strait produces the same downstream effect: Saudi crude stops reaching its buyers. The two risks are linked by geography even when they originate from different threats.

Fujairah sits on the Gulf of Oman coast of the United Arab Emirates, on the far side of the Hajar Mountains from Dubai and Abu Dhabi. For most of its history it was the smallest and least developed of the seven emirates, with a fishing economy and a geography that made connection to the Emirati interior difficult. What transformed Fujairah was the recognition, by Abu Dhabi planners and international oil traders simultaneously, that a port on the Gulf of Oman side of the UAE was worth more than a port on the Arabian Gulf side because it lay outside the Strait of Hormuz. Its strategic value is a function of what it avoids.

Every serious analysis of Hormuz closure scenarios eventually arrives at the same question: how much oil can get out without using the strait? The answer, consistently, is not enough — and understanding why requires examining the bypass infrastructure that exists, the infrastructure that has been proposed, and the fundamental mismatch between pipeline capacity and the volumes the strait normally moves.

The numbers establish the problem. On a normal day, somewhere between 17 and 21 million barrels of crude oil and petroleum products transit Hormuz. The combined nameplate capacity of all existing bypass pipelines is a fraction of that figure, and nameplate capacity is not operational capacity. The infrastructure must be maintained, staffed, protected, and in some cases reversed from its normal flow direction before it becomes useful in a closure scenario. The gap between what the strait moves and what the alternatives can handle does not close quickly.