The US/Israel war on Iran and the blockade of the Strait of Hormuz have exposed deep vulnerabilities in Gulf and global energy supply chains, accelerating efforts to develop alternative corridors, pipelines, and rail links. However, fragmentation, financing constraints, and regional instability risk producing competing rather than integrated systems. Europe could support coordination but must remain realistic.

IN NEED OF ALTERNATIVE ROUTES

The effects of the US/Israeli war on Iran extend beyond immediate physical damage and now encompass economic disruption, heightened security risks, political pressure, and growing uncertainty across regional and global markets. The Strait of Hormuz remains one of the world’s most strategically significant energy corridors. Saudi Arabia, Iraq, Kuwait, Iran, and the United Arab Emirates (UAE) collectively transport roughly one-quarter of global crude oil exports through this narrow passage. In 2025, the waterway handled approximately 16.7 million barrels per day (mb/d) of crude and condensate, with the majority destined for Asian markets. It also carried roughly 25% of global LNG flows, driven largely by Qatari exports. By March 1, tanker traffic through the Strait had collapsed by 98%, falling from an average of around 14 mb/d to just 250,000 b/d. This abrupt contraction has exposed the fragility of global energy supply chains and underscored the structural dependence of global markets on uninterrupted Gulf maritime transit.
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Although all Gulf Cooperation Council (GCC) states have been affected, the impact is uneven. Kuwait and Bahrain are the most exposed due to their complete reliance on the Strait of Hormuz as their sole export corridor. Qatar faces a different but equally acute vulnerability because LNG accounts for roughly 45% of its hydrocarbon export volumes and there are no comparable alternative LNG export routes in the region. Oman is comparatively insulated due to its geographic position along the Indian Ocean, which allows it to bypass the Strait entirely. Saudi Arabia and the UAE occupy a more intermediate position, absorbing significant disruption but maintaining partial export flexibility through alternative infrastructure.
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The UAE, for instance, has been particularly exposed to direct attacks, with more than 2,200 drone strikes and 550 missile attacks reported since the start of the conflict, more than any other Gulf state. Despite this exposure, the UAE retains partial resilience through the Abu Dhabi crude oil pipeline between Habshan and Fujairah, which can bypass the Strait but is limited to around 1.8 million barrels per day, below its 2025 export level of 2.85 million barrels per day.
Saudi Arabia similarly benefits from geographic and infrastructural diversification. It can also reroute its exports via the Abqaiq-Yanbu pipeline system (East-West Crude Pipeline, or Petroline). The pipeline has a capacity of approximately 5 mb/d, compared to Saudi export volumes of around 7.3 mb/d. Originally constructed in 1982 during the Iran-Iraq War (1980-1988) to mitigate maritime insecurity in the Gulf, the pipeline remains a central element of Saudi energy resilience. In 2018, the Yanbu South Terminal was expanded to increase export capacity to Europe by approximately 3 mb/d.

CHALLENGES IN INTERCONNECTIVITY

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Nevertheless, these alternative routes do not eliminate systemic vulnerability. Pipeline infrastructure can itself become a target, as demonstrated by previous attacks on the Abqaiq-Yanbu pipeline in April, or on the Abu Dhabi Crude Oil Pipeline in March and the port of Fujairah in May. The port of Yanbu also faces capacity limitations although the Yanbu South Terminal was expanded in 2018 to increase export capacity to Europe by approximately 3 mb/d. Moreover, Saudi Arabia’s reliance on the Red Sea introduces exposure to another strategic chokepoint: the Bab el-Mandab Strait. Should this corridor be disrupted, particularly through escalation involving the Houthis in Yemen, Saudi Arabia would lose a critical alternative export route, placing additional strain on both its economy and global energy markets.
Overall, Gulf states are now operating under a dual constraint. They remain structurally dependent on vulnerable maritime chokepoints such as the Strait of Hormuz, the Bab el-Mandab or the Suez Canal. At the same time, they are compelled to accelerate diversification strategies, including pipelines, port expansion, and regional interconnection projects, many of which were already planned but are now being implemented on an expedited basis. The result is an emerging security and economic environment defined not by the elimination of risk, but by its redistribution across a broader and still fragile infrastructure network.


INITIATIVES FOR REGIONAL INTERCONNECTIVITY

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For instance, Saudi Arabia and Egypt intend to cooperate more closer through a corridor linking Egypt’s Mediterranean and Red Sea port infrastructure with Saudi Arabia’s Red Sea ports designed to reduce dependence on contested sea lanes and enhance resilience in Gulf supply chains. Cargo originating in Europe, particularly from ports such as Trieste in Italy on the Adriatic Sea, is shipped across the Mediterranean to Egypt’s Port of Damietta. From there, goods are transported overland through Egypt to the Red Sea, reaching the Port of Safaga. At this stage, cargo is reloaded onto vessels for onward shipment to Gulf markets via Saudi Arabia’s Red Sea ports, including Dubai. In recent weeks, this route has already handled hundreds of tons of both refrigerated and dry cargo.
Despite ongoing tensions between Saudi Arabia and the UAE, the Saudi Ports Authority (Mawani) has announced a partnership with the Sharjah-based logistics operator Gulftainer to enhance connectivity between Dammam in Saudi Arabia’s Eastern Province and Sharjah in the UAE, as well as with Qatar Ports Management Company.

The UAE also extends its logistical cooperation with Oman through the so-called temporary “Green Corridor” to better connect Omani and Emirati ports and free zones as shipments will be diverted through Omani ports to Dubai. In April, the UAE also established a new currency swap agreement with Bahrain with a volume of USD 5.44 billion for five years to enhance financial interconnectivity.

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As maritime chokepoints are currently under stress, interregional railway connections have been under discussion for years but gain more attention amid the current crisis. Here, Saudi Arabia aims to better connect with Jordan by linking its King Abdulaziz Port in Dammam, Al-Jubail Commercial Port, and King Fahd Industrial Port in Jubail with the Al-Haditha border crossing to Jordan. Further plans exist to link the railway systems of Türkiye, Jordan, Syria, and Saudi Arabia aimed at connecting Southern Europe and the Gulf. The Kingdom is already heavily invested in the Jordan market, and both governments have recently signed an agreement to improve cooperation between Jordan’s Ministry of Investment, the Saudi Economic Cities and Special Zones Authority.

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Iraq has also emerged as a potential hub for landline interconnectivity. There, the Development Road project, with a total volume of USD 17 billion, has already been launched in 2023, with the aim to connect Iraq’s Al-Faw Grand Port to Türkiye’s border and link Asia to Europe. Beyond Iraq and Türkiye, the UAE and Qatar are also stakeholders and formal signatories to the project. Further proposals such as the Basra-Haditha pipeline, along with potential extensions toward Jordan’s Red Sea port of Aqaba and Syria’s port of Baniyas on the Mediterranean, are intended to establish alternative crude export outlets beyond the Gulf. In parallel, discussions on reviving a long-dormant Iraq-Saudi pipeline reflect a broader strategic effort to reduce reliance on existing transit corridors.

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CHALLENGES REMAIN

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However, those initiatives have not yet materialized due to persistent local and regional instability, weak coordination and planning frameworks, administrative mismanagement, and ongoing political fragmentation within Iraq. In addition, the project’s effectiveness depends heavily on Iraq’s capacity to integrate it with its expanding pipeline and transport networks. Without such integration, its operational efficiency and strategic value would remain limited. At the same time, the current regional crisis is also exacerbating intra-Gulf political fault lines, including tensions between, on the one hand, the UAE and, on the other, Qatar and Saudi Arabia. Against this backdrop, it remains uncertain whether Abu Dhabi’s and Doha’s commitment to long-term investment in the Development Road project will be sustained under conditions of heightened geopolitical fragmentation. As the regional order becomes more fragile, intensifying competition and entrenched rivalries are likely to undermine coordinated efforts in cross-border connectivity. Significant infrastructure investment will be required, particularly in Syria, which continues to face internal divisions and persistent instability. At the same time, Gulf states are absorbing the economic and operational costs of the conflict, including damage to critical national energy infrastructure, which may constrain their external investment capacity. As a result, financing priorities could shift toward domestic reconstruction, potentially limiting the availability of capital for large-scale cross-border connectivity projects. In addition, overlapping initiatives are increasingly competing for the same pools of funding, external investment, and political backing, reducing the likelihood of unified implementation. If multiple regional actors – including Gulf states, Syria, Iraq, Türkiye, Jordan, and Egypt – seek to position themselves as central hubs in emerging interconnectivity networks, there is a growing risk that parallel and partially redundant infrastructure systems will develop. Rather than producing a single integrated framework, these competing corridors could fragment regional logistics architecture and ultimately undermine one another’s strategic and economic viability.

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WHAT DOES IT MEAN FOR EUROPE?

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While difficult to achieve, collective frameworks based on shared economic and security interests offer a viable pathway to overcoming the current crisis and reducing dependence on vulnerable maritime chokepoints. Here, European countries and the European Union (EU) could play a constructive role in facilitating dialogue among regional stakeholders, helping to manage expectations, reduce mistrust, and develop a coherent long-term strategy for interconnectivity that links the region more effectively with Europe. Given that Europe is also affected by the economic and energy disruptions of the conflict, it has a strong interest in diversifying supply chains and securing alternative trade routes. In this context, closer cooperation with Gulf states and other regional actors becomes increasingly important. EU initiatives such as Global Gateway could serve as a key instrument to support enhanced interconnectivity by mobilizing investment and fostering infrastructure integration. At the same time, Europe could intensify efforts to promote regional harmonization by encouraging the establishment of joint corridor working groups, for example between Jordan and Saudi Arabia, as well as other regional partners. These mechanisms could improve coordination on infrastructure planning, cross-border logistics, and broader issues linked to Syria’s reconstruction, which remains a critical component in several proposed connectivity projects. The EU can also contribute technical, administrative, and legal expertise to support logistical integration and help align emerging corridors with European standards and market requirements.
However, a sense of realism beyond wishful thinking is necessary. Confidence-building measures are essential to reduce regional tensions, manage competing national ambitions, and promote a more cooperative approach to corridor development. Flagship initiatives such as the India-Middle East-Europe Economic Corridor (IMEC) were originally designed to bridge connectivity gaps by linking Gulf economies to Europe through a multimodal transport and energy network. Since the war in Gaza, however, the project has become significantly more politically complex, particularly due to its initial reliance on routes passing through Israel and growing domestic and regional pressure on Arab states, including Saudi Arabia, to limit normalization

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