The Geopolitical Situation at the Strait of Hormuz: US and Allies Seek Long-term Solutions
For decades, Iran has utilized the Strait of Hormuz as its most effective geopolitical weapon. This critical energy bottleneck serves as the transit point for approximately one-third of the world's oil production and about one-fifth of liquefied natural gas (LNG) shipments. When Tehran blocked maritime traffic through the strait following joint military operations by the United States and Israel on February 28, shipping activities came to a standstill, causing oil prices to surge by more than 70%.
The potential for a prolonged blockade extending to the US midterm elections on November 3 was a decisive factor in President Donald Trump's consideration of signing a peace agreement, at least in the short term. There exists a direct correlation between oil prices, gasoline costs, US economic growth, and the success of incumbent presidents and parties in elections, as analyzed in detail in my recent book on the global oil market order.
US and Allied Strategies
According to information from multiple high-level energy security sources in London, Brussels, and Washington, significant steps are being taken to restructure the regional energy map. The objective is to ensure that the threat from Iran at the Strait of Hormuz becomes increasingly ineffective in the coming years.
President Trump has endorsed medium and long-term approaches to bypass the Strait of Hormuz, particularly as short-term measures have proven less effective following Tehran's blockade. The "Southern Highway" corridor along Oman's coast has been established with support from US and Gulf allies, allowing a certain number of vessels to pass, though traffic has not yet returned to the pre-blockade level of 700 ships per week.
| Indicator | Pre-Blockade | During Blockade |
|---|---|---|
| Weekly ship traffic | 700 | 119 |
| Daily oil tanker shipments via Iraq | 3.3-3.4 million barrels | 125,000 barrels |
Implemented Solutions
Several other measures have been implemented, including expanding the capacity of Saudi Arabia's East-West Pipeline to 7 million barrels per day, though actual export capacity reaches only about 4.5 million barrels per day due to bottlenecks at the Yanbu port. The UAE's 360-kilometer Habshan-Fujairah Pipeline has been upgraded to handle 1.8 million barrels per day.
Oil supplies from the United States and other nations have been increased, alongside the release of millions of barrels from strategic petroleum reserves of International Energy Agency member countries. This has created an important buffer against economic impacts during the blockade period.
Long-term Plans
The United States is pursuing long-term solutions to reduce dependence on the Strait of Hormuz. Initial efforts aim to bypass approximately 50% of oil flowing through the strait by utilizing existing land corridors and accelerating new infrastructure development.
The UAE is rapidly constructing a parallel pipeline to Fujairah, expected to double bypass capacity to over 3 million barrels per day, with completion projected for 2027. A similar initiative proposed by the United States would enable Iraq to pump more oil from northern fields through the Kirkuk-Ceyhan pipeline to Turkey's Mediterranean coast.
| Pipeline | Capacity (barrels/day) | Status |
|---|---|---|
| East-West Pipeline | 7 million | Can export 4.5 million |
| Habshan-Fujairah Pipeline | 1.8 million | Operating at maximum capacity |
| Kirkuk-Ceyhan Pipeline | 170,000-250,000 | Being restored |
The India-Middle East-Europe Economic Corridor
One of the most significant components of US efforts to reduce dependence on the Strait of Hormuz is the India-Middle East-Europe Economic Corridor (IMEC). Launched at the G20 Summit in 2023, the project had stalled due to regional conflicts. However, with the blockade of the Strait of Hormuz, the initiative has been accelerated, with the potential to redirect approximately 60% of current container shipping traffic.
IMEC comprises two integrated corridors: a maritime branch connecting western Indian ports with the Arabian Gulf, and a land-based rail network running through Saudi Arabia and Jordan to Israel's Haifa port.
These measures demonstrate that Washington and its allies are no longer solely relying on short-term crisis management but are constructing a multi-route long-term architecture. This approach minimizes economic impacts from future blockades. The long-term objective is clear: to ensure that the next crisis at Hormuz does not escalate into a global crisis.
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