The Hormuz War Will End

Why It Matters

Without diversified, Hormuz‑independent transport routes, global supply chains for fuel, chemicals and food production remain vulnerable to geopolitical shocks, threatening economic stability worldwide.

Key Takeaways

• Hormuz closure cuts 9‑10 million barrels of crude daily from markets.
• 20% of global LNG supply and 5 million bpd refined products lost.
• Saudi Petroline and UAE ADCOP are only existing Hormuz bypass pipelines.
• Doubling pipeline capacity and adding refined‑product lines could avert future crises.
• U.S. leadership essential to finance and coordinate multinational bypass projects.

Pulse Analysis

The Strait of Hormuz, a 21‑mile chokepoint, has become the flashpoint of an unprecedented energy crisis. By diverting up to 10 million barrels of crude oil, half a million barrels of diesel and jet fuel, and a fifth of the world’s liquefied natural gas each day, the disruption ripples through manufacturing, agriculture and transportation. Compared with the 1973 Arab oil embargo, the current shortfall is broader, touching everything from fertilizer production to semiconductor manufacturing, and has already forced countries like Sri Lanka, Thailand and Pakistan to adopt four‑day workweeks.

Infrastructure gaps lie at the heart of the vulnerability. Saudi Arabia’s 746‑mile Petroline and the UAE’s 1.7 million‑bpd ADCOP are the only pipelines that skirt Hormuz, yet they move only crude and operate near full capacity. They lack dedicated lines for refined products such as diesel, jet fuel and LPG, which are now in acute shortage. A pragmatic solution involves doubling the capacity of these pipelines, adding parallel refined‑product terminals, and constructing a new high‑capacity corridor linking southern Iraq and Kuwait through Kurdish Iraq to Turkey’s Ceyhan port. Modernizing the aging Kirkuk–Ceyhan route would unlock billions of barrels that currently must transit Hormuz.

U.S. leadership is pivotal to turning this vision into reality. By leveraging the U.S. International Development Finance Corporation, the World Bank and sovereign wealth funds, Washington can convene Gulf producers, consuming nations and private investors to fund the bypass network. Such a coalition mirrors the strategic infrastructure investments that blunted the 2022‑23 energy shock—Southern Gas Corridor, expanded LNG terminals and reverse‑flow pipelines. While environmentalists warn about new fossil‑fuel projects, the reality is that oil and gas still supply roughly 80% of global energy, underpinning essential industries. Securing diversified transport routes now safeguards the existing economy and buys time for a smoother transition to clean energy.