OPINION | The race to bypass Hormuz will transform the Persian Gulf | Iran-Gulf Crisis

Summary

Middle East oil producers face a reckoning. The Iran war exposed the dangers of relying on a single chokepoint for vital oil and gas exports, leaving Persian Gulf governments with a clear strategic imperative: diversify – at all costs. An Iranian blockade of the Strait of Hormuz had long been viewed as a “doomsday” event that would never happen. Experts assumed it would require a massive military effort and that Tehran would be reluctant to choke off its own exports. Those assumptions were proven painfully wrong. Iran imposed a near-airtight blockade using cheap drones, small vessels and mines, while continuing to export its own oil, at least until the US Navy imposed its own blockade on Iranian shipping. This stranded a fifth of the world’s oil and liquefied natural gas supplies, triggering unprecedented turmoil across the region’s vast energy industry, with repercussions felt worldwide. Countries lost vital export revenues and were forced to shut down around 11 million barrels per day (bpd) of oil production, along with multiple refineries and LNG facilities. While Washington and Tehran have agreed to negotiate a permanent peace deal, the “Hormuz genie” cannot be put back into the bottle. Future closures are now a real and persistent risk for the gulf and the global economy. As a result, developing alternative routes for exports of energy, chemicals and fertiliser has become a matter of economic survival for gulf nations. Saudi Arabia offers the clearest example of the benefits of building pipelines that circumvent Hormuz. Before the war, the world's largest oil exporter diverted around 60 per cent of its shipments to the Red Sea port of Yanbu, using a cross-country pipeline from the gulf coast. State-owned Saudi Aramco built the 1,200-kilometre (745-mile) route in the 1980s precisely to hedge against this type of scenario. That strategic foresight paid off. The International Monetary Fund said in April that it expects Saudi Arabia’s economy to grow by 3.1 per cent in 2026, down just 1.4 percentage points from its pre-war forecast. By contrast, Qatar, which had no alternative routes for its oil and LNG exports, could see its economy contract by 8.6 per cent this year, after growing by 2.8 per cent in 2025, according to the IMF. Other regional players have taken note. The United Arab Emirates was able to partially bypass Hormuz using its pipeline to the Fujairah oil terminal, located just outside the Strait. Fujairah was disrupted after it came under Iranian fire, but the UAE was still able to export around 1.8 million bpd, roughly half of its pre-war output. Abu Dhabi, which left OPEC in May to pursue an ambitious growth strategy, is now accelerating construction of a second pipeline to double export capacity via Fujairah by 2027. Iraq remains in an unenviable position. It is heavily reliant on Hormuz because most of its production is concentrated in the south. Authorities and companies operating in Iraq are thus examining ways to upgrade and expand northern export routes through Turkey and Syria. However, security and political concerns remain significant obstacles. Qatar and Kuwait face a far more complex challenge. Lacking alternative export routes within their own territories, both countries will effectively be forced to rely on neighbours to circumvent Hormuz. The predicament is especially acute for Qatar, the world’s leading LNG exporter. To gain access beyond the strait, the emirate would need to build a pipeline through the UAE to Fujairah or Oman, or across Saudi Arabia to the Red Sea. Each option is fraught with geopolitical and commercial complications. Such projects would likely require constructing new liquefaction capacity outside the gulf, driving costs sharply higher. Taking this route would also leave Qatar heavily dependent on Saudi Arabia or the UAE - countries whose relations with Doha have been strained in recent years. This creates political and strategic risks that the country has long sought to avoid. Kuwait faces a similar dilemma. Developing alternative export routes would almost certainly require deepening energy integration with Saudi Arabia, further underscoring how geography may reshape regional alliances moving forward. Another response gaining traction is geographic diversification beyond the Middle East. Gulf national oil companies are increasingly looking to expand overseas operations, effectively creating a hedge against future regional disruption. QatarEnergy and Abu Dhabi National Oil Company (ADNOC) have led the way, building international portfolios spanning oil, gas and renewables. This trend is now apt to accelerate. Acquiring stakes in upstream assets, refineries, LNG facilities and storage terminals abroad would provide valuable income streams that are insulated from gulf risk. In a world where Hormuz can no longer be taken for granted, such investments offer the promise not just of growth, but also resilience. As Middle East producers begin the gradual recovery process, the race for diversification will reshuffle international alliances, shake up long-term government strategy and redirect investment. In other words, it could reshape the region for decades to come. (Reporting by Ron Bousso Editing by Marguerita Choy)

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Jun 22, 2026diplomacyUnverifiedUSIsraelIranProxy

US-Iran Peace Deal Live: Iranian President to visit Pakistan on Tuesday as peace talks yield 60-day roadmap

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Advertisement US-Iran peace deal US-Iran Peace Deal Live: Iranian President to visit Pakistan on Tuesday as peace talks yield 60-day roadmap New Delhi,UPDATED: Jun 22, 2026 19:20 IST US-Iran Peace Deal News Live Updates: US-Iran diplomacy gained momentum after a marathon round of talks in Switzerland produced what mediators Pakistan and Qatar described as a roadmap for a final agreement within 60 days.

US Vice President JD Vance said Tehran had agreed to allow nuclear inspectors into the country and work on mechanisms covering frozen Iranian assets, regional ceasefires and the Strait of Hormuz. Vance said discussions on nuclear inspections could begin as early as this week, while technical teams will remain engaged even after Iran's top negotiators returned to Tehran following 18 hours of intensive negotiations.

The talks also established a communication channel to help ensure safe commercial shipping through Strait of Hormuz and a mechanism aimed at preventing renewed fighting in Lebanon between Israel and Hezbollah. Despite the diplomatic progress, tensions remained visible.

Iran had briefly closed the Strait of Hormuz over the weekend, accusing the United States of failing to uphold commitments to halt fighting in Lebanon. However, mediators said discussions were held in a constructive atmosphere and yielded encouraging progress.

Iranian President Masoud Pezeshkian is set to visit Pakistan on Tuesday in a trip expected to focus on bilateral cooperation and follow-up discussions on Islamabad's mediation efforts. Meanwhile, a fragile ceasefire in Lebanon largely held, marking the longest lull in violence in three months of conflict.

Lebanese officials reported near-total adherence to the truce despite isolated incidents, while Israeli leaders insisted any final agreement must ensure Iran cannot use future financial relief to support military activities or regional proxy groups.

Follow IndiaToday.in for the latest updates....Read More Iranian President Masoud Pezeshkian is expected to arrive in Pakistan on a one-day visit on Tuesday. (File Photo: Press TV) 2 Jun 22, 2026 19:20 IST US-Iran Deal: Iranian President to visit Pakistan Iranian President Masoud Pezeshkian will make a one-day visit to Pakistan on Tuesday, Iranian officials said.

Habib Abbasi, director-general of public relations at the presidential office, said the trip will focus on implementing previous agreements and exploring new trade opportunities. Pezeshkian is also expected to "express appreciation" for Pakistan's role in mediating between Iran and the United States, according to Tasnim news agency.

Jun 22, 2026 19:14 IST US-Iran Deal: Here's what happened so far - US Vice President JD Vance said talks with Iran made significant progress, with Tehran agreeing to allow nuclear inspectors, establish mechanisms for handling frozen assets and support efforts to manage regional ceasefires.

- Speaking after negotiations in Switzerland, Vance said discussions on nuclear inspections could begin as early as this week and confirmed that technical talks would continue in the coming days and weeks. - Iran’s senior negotiating team departed Switzerland for Tehran after 18 hours of intensive discussions, while technical experts remained behind to continue work on the Islamabad memorandum of understanding.

- Pakistan and Qatar, which mediated the talks, said Washington and Tehran agreed on a roadmap aimed at reaching a final agreement within 60 days and described the first round of negotiations as encouraging. - The two sides also agreed to establish a mechanism to help prevent clashes in Lebanon and create a communications channel to safeguard commercial shipping through the Strait of Hormuz, a vital route for global oil supplies.

- The talks followed an interim agreement reached last week and continued despite renewed tensions after President Donald Trump threatened military action against Iran and Tehran warned Washington over its rhetoric. - Iranian President Masoud Pezeshkian is scheduled to visit Pakistan on Tuesday for a one-day trip.

Iranian officials said he would discuss bilateral cooperation and express appreciation for Islamabad’s role in facilitating US-Iran diplomacy. - A ceasefire in Lebanon largely held on Monday, marking the longest period of relative calm in nearly three months of conflict between Hezbollah and Israel, although isolated incidents were still reported.

- Lebanese security officials said adherence to the ceasefire had been "almost total" since Saturday evening, despite reports of limited Israeli military activity in southern Lebanon and drone flights over Beirut. - The conflict in Lebanon has remained a major test for the interim US-Iran agreement, with Tehran previously accusing Washington of failing to ensure an end to hostilities and briefly reimposing restrictions in the Strait of Hormuz.

- Vance said progress had also been made toward reducing tensions in Lebanon, while negotiators worked to establish safeguards aimed at preventing future escalation. - Iranian Foreign Minister Abbas Araqchi said Tehran had secured waivers for oil and petrochemical exports, the release of some frozen assets and the launch of a reconstruction and development programme under the broader diplomatic framework.

- Oil prices, which surged after tensions disrupted shipping through the Strait of Hormuz, fell further after the latest round of talks, easing concerns about global supply disruptions. - Pakistani Prime Minister Shehbaz Sharif described the negotiations as constructive and said the first round of talks had concluded successfully, laying the groundwork for a broader peace agreement.

- Israeli officials signalled support for a diplomatic resolution but stressed that any final deal must ensure Iran cannot use financial relief or released assets to fund military activities or regional proxy groups.

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OPINION | The race to bypass Hormuz will transform the Persian Gulf

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