A New Artery in the Red Sea: Saudi Arabia plans to invest billions of dollars to expand its oil pipeline, aiming to address the "choke point" dilemma in the Strait of Hormuz.
2026-07-07 15:20:08
On Tuesday (July 7), according to overseas media reports, sources said that Saudi Arabia is considering expanding the capacity of the East-West Pipeline (also known as the Petroline), which connects its eastern oil-producing region with the western shore of the Red Sea, by up to 2 million barrels per day, and has already held preliminary consultations with some neighboring countries on accessing the pipeline system. This move aims to provide Saudi Arabia and its neighbors with more crude oil export routes bypassing the Strait of Hormuz. Since the outbreak of the Iraq War in February 2026, shipping through the Strait of Hormuz has been almost completely disrupted, and this pipeline, built in the 1980s, has become the most critical energy lifeline in the Gulf region.
The Strait of Hormuz is the world's most critical chokepoint for oil transportation. Before the conflict, according to the International Energy Agency (IEA), approximately 20 million barrels of crude oil and refined petroleum products were transported through the strait daily. On April 19, 2026, Iranian armed forces blocked two oil tankers attempting to pass through the strait; no vessels were recorded passing through that day. In the weeks that followed, Iran's de facto control of the Strait of Hormuz plunged global shipping and energy markets into severe chaos.
This blockade has dealt a devastating blow to Gulf oil-producing countries. Iran's blockade of the Strait of Hormuz forced Gulf oil producers to shut down production by as much as 12 million barrels per day, causing oil prices to soar. In May, Iraqi oil production plummeted from 4.3 million barrels per day to less than 1.5 million barrels per day; in March, Kuwait declared force majeure; and the Sitra refinery in Bahrain was repeatedly attacked by Iranian missiles.
Against this backdrop, Saudi Arabia’s East-West oil pipeline has become the only alternative export route that can bypass Hormuz on a large scale.
The East-West oil pipeline is approximately 1,200 kilometers long, connecting Saudi Arabia's main oil-producing region in the east with the port of Yanbu on the western Red Sea coast. Built during the Iran-Iraq War in the 1980s, it was initially designed as a strategic backup route.
In the first quarter of 2026, the pipeline's capacity had been significantly increased to a maximum transport capacity of 7 million barrels per day. Saudi Aramco President and CEO Amin Nasser said in May, "Our east-west pipeline has reached a maximum transport capacity of 7 million barrels of oil per day, proving to be a vital supply artery that helps mitigate the impact of global energy shocks."
Production capacity allocation: Of the 7 million barrels per day shipping capacity, approximately 2 million barrels are supplied to refineries on Saudi Arabia's west coast, with the remaining 5 million barrels for export. Currently, crude oil exports through Yanbu Port have reached 5 million barrels per day. In addition, Saudi Arabia exports approximately 700,000 to 900,000 barrels of refined petroleum products per day.
Saudi Aramco's maximum sustainable production capacity is 12 million barrels per day, but its current actual output is limited by OPEC+ quotas, averaging between 10 million and 10.5 million barrels per day. Existing land pipelines alone are insufficient to fully fill the capacity gap caused by the obstruction of navigation through the Strait of Hormuz.
Core Expansion Goal: According to sources, Saudi Arabia is considering expanding the pipeline's capacity by up to 2 million barrels per day. It is unclear whether Saudi Aramco plans to upgrade existing infrastructure or build a new pipeline. One source stated that the capacity increase would include a smaller second oil pipeline.
Progress in consultations with neighboring countries: Sources say Saudi Arabia has held preliminary talks with some of its neighbors regarding access to the pipeline system. Kuwait, Bahrain, and Qatar all lack routes around the Strait of Hormuz, while the Iraq-Turkey pipeline is operating far below capacity due to disputes and repeated shutdowns.
Sheikh Nawaf al-Sabah, CEO of Kuwait Petroleum Corporation, stated clearly at the Atlantic Council's Global Energy Forum last month: "We are in discussions with our brothers in Saudi Arabia and the UAE about how to expand their existing pipeline systems to accommodate Kuwait's oil."
Project Scale and Challenges: Sources say the expansion project could increase capacity to 1 to 2 million barrels per day, with refined petroleum products also under consideration. The sources also indicate the project will take several years, cost billions of dollars, and require reform of Saudi Arabia's crude oil pricing mechanism.
Qatar's predicament: Sources say Qatar, a major exporter of liquefied natural gas, is facing greater technical hurdles and is considering several potential alternatives, including transporting it through Saudi Arabia's pipeline system.
The UAE's first-mover advantage: The UAE is the only country in the Gulf region with considerable Hormuz bypass capacity and has completed half of the construction of a new West-East Oil Pipeline. This pipeline, scheduled to be operational in 2027, will double Fujairah's crude oil transport capacity. The UAE's existing Abu Dhabi oil pipeline has a daily transport capacity of 1.8 million barrels. Furthermore, the UAE is planning a new pipeline to double the existing daily capacity from 1.8 million barrels to 3.6 million barrels.
Iraq's alternative attempt: Iraq has "opened up" a land-based oil pipeline connecting the northern Kurdistan Region with the southern Turkish port of Ceyhan, with an initial capacity of 250,000 barrels per day. The Iraqi Ministry of Oil also announced the restoration of a previously idle land-based oil pipeline, with an initial capacity of 350,000 barrels per day and a final target of 400,000 barrels per day.
Regional pipeline construction boom: During the current Middle East conflict, several new pipelines are planned to transport Middle Eastern crude oil to Mediterranean ports via Turkey and Syria, reshaping the regional energy logistics landscape.
Oil Prices and Market Reaction: With the resumption of navigation in the Strait of Hormuz, oil exports from the Gulf region rose in June. According to Kpler data, total crude oil and condensate exports from Saudi Arabia, the UAE, Kuwait, Iraq, and Iran increased by more than 3.5 million barrels per day compared to May, reaching 10.07 million barrels per day. Brent crude oil recently fell back to around $70 per barrel.
However, recovery is not yet complete. As of the end of June, the daily traffic volume in the Strait of Hormuz had only recovered to about 57% of pre-conflict levels. Since the ceasefire on June 17, Saudi Arabia has transported approximately 34 million barrels of crude oil through the Strait of Hormuz, but commercial traffic volume remains at about one-third of pre-war levels.
The competition between Saudi Arabia and the UAE: An industry insider stated that Saudi Arabia's expansion "suggests that the next phase of competition between Saudi Arabia and the UAE after the war may be a race to produce oil, and therefore a race to the price." Both countries are accelerating the construction of alternative export routes.
Strategic significance assessment: “The recent negotiations between Saudi Arabia, Kuwait and Qatar on a new oil pipeline corridor reflect a broader strategic reality. This conflict has made countries in the region more aware of the risks of relying solely on Hormuz,” said Zaid Belbaj, managing partner of London-based Hardcastle Consulting.
The expansion plan for Saudi Arabia's East-West oil pipeline is a landmark event in the strategic restructuring of energy infrastructure in the Gulf region. From a data perspective, the current full-capacity operation of 7 million barrels per day has clearly exposed the vulnerability of a single pipeline – even operating at full capacity, it cannot completely replace the nearly 20 million barrels per day transport capacity through the Strait of Hormuz. While the additional 2 million barrels per day of capacity cannot fundamentally solve the capacity gap, interconnection with pipelines from Kuwait, Qatar, and other countries will build a more resilient export network at the regional level.
From a competitive perspective, the race between Saudi Arabia and the UAE over bypass routes has evolved from an emergency response into a long-term strategic game. This will not only affect the distribution of energy power within the Gulf, but will also reshape the global crude oil trade flow and pricing mechanism.
From a time perspective, the fact that this project took several years and cost billions of dollars means that regardless of how the situation in the Strait of Hormuz evolves, the strategic investment of Gulf oil-producing countries in alternative routes has become an irreversible trend. The global energy market needs to face this structural shift squarely—bypassing the Strait of Hormuz is no longer just a crisis response solution, but a permanent component of the Gulf energy export system.
Question 1: How much crude oil can Saudi Arabia's existing East-West oil pipelines currently transport per day?
A: As of the first quarter of 2026, the Saudi East-West Pipeline/Petroline had reached its maximum transport capacity of 7 million barrels per day. Of this, approximately 2 million barrels are supplied to refineries on the Saudi west coast, and the remaining approximately 5 million barrels are exported via the Red Sea port of Yanbu. The pipeline is approximately 1,200 kilometers long, connecting the main oil-producing region in the east with the western Red Sea coast.
Question 2: Why does Saudi Arabia want to expand this pipeline?
A: The direct cause is the near-disruption of shipping through the Strait of Hormuz following the US-Iran war that erupted in February 2026. Iran's de facto control of the strait forced Gulf oil-producing countries to halt production by up to 12 million barrels per day. The expansion aims to increase shipping capacity around the Strait of Hormuz, providing a more reliable export route for Saudi Arabia and its neighbors (such as Kuwait, Bahrain, and Qatar, which lack alternative routes).
Question 3: What is the specific scale of the expansion plan? Which countries are involved?
A: According to sources, the expansion plan aims to add 1 to 2 million barrels per day of transportation capacity. Saudi Arabia has held preliminary consultations with some neighboring countries. The CEO of Kuwait Petroleum Corporation has publicly confirmed that discussions are underway with Saudi Arabia and the UAE to expand the existing pipeline system to accommodate Kuwaiti oil. Qatar is also considering alternatives to transporting liquefied natural gas via Saudi pipelines.
Question 4: What is the current navigation status of the Strait of Hormuz?
A: As of early July 2026, the daily traffic volume in the Strait of Hormuz had only recovered to about 57% of pre-conflict levels. Since the US-Iran ceasefire on June 17, Saudi Arabia has transported approximately 34 million barrels of crude oil through the strait, but commercial transport volume remains at about one-third of pre-war levels. Independent tanker operators still face war risk insurance premiums that are about eight times higher than before the conflict.
Question 5: What does this expansion plan mean for the global energy market?
A: This plan marks a shift in the Gulf oil-producing nations' strategic investment in alternative export routes from emergency response to long-term planning. Even if the Strait of Hormuz is fully reopened to navigation, the competition between Saudi Arabia and the UAE over bypass routes has evolved into a protracted struggle. This structural shift will affect global crude oil trade flows, the distribution of energy power within the Gulf, and international oil pricing mechanisms. The project's multi-year duration and billions of dollars in cost indicate that bypassing Hormuz is becoming a permanent component of the Gulf's energy export system.
At 15:19 Beijing time, Brent crude oil was trading at $72.83 per barrel.
I. Strategic Background: The Energy Lifeline Under the Hormuz Dilemma
The Strait of Hormuz is the world's most critical chokepoint for oil transportation. Before the conflict, according to the International Energy Agency (IEA), approximately 20 million barrels of crude oil and refined petroleum products were transported through the strait daily. On April 19, 2026, Iranian armed forces blocked two oil tankers attempting to pass through the strait; no vessels were recorded passing through that day. In the weeks that followed, Iran's de facto control of the Strait of Hormuz plunged global shipping and energy markets into severe chaos.
This blockade has dealt a devastating blow to Gulf oil-producing countries. Iran's blockade of the Strait of Hormuz forced Gulf oil producers to shut down production by as much as 12 million barrels per day, causing oil prices to soar. In May, Iraqi oil production plummeted from 4.3 million barrels per day to less than 1.5 million barrels per day; in March, Kuwait declared force majeure; and the Sitra refinery in Bahrain was repeatedly attacked by Iranian missiles.
Against this backdrop, Saudi Arabia’s East-West oil pipeline has become the only alternative export route that can bypass Hormuz on a large scale.
II. Current Status of the East-West Pipeline: 7 million barrels/day of full-capacity operation
The East-West oil pipeline is approximately 1,200 kilometers long, connecting Saudi Arabia's main oil-producing region in the east with the port of Yanbu on the western Red Sea coast. Built during the Iran-Iraq War in the 1980s, it was initially designed as a strategic backup route.
In the first quarter of 2026, the pipeline's capacity had been significantly increased to a maximum transport capacity of 7 million barrels per day. Saudi Aramco President and CEO Amin Nasser said in May, "Our east-west pipeline has reached a maximum transport capacity of 7 million barrels of oil per day, proving to be a vital supply artery that helps mitigate the impact of global energy shocks."
Production capacity allocation: Of the 7 million barrels per day shipping capacity, approximately 2 million barrels are supplied to refineries on Saudi Arabia's west coast, with the remaining 5 million barrels for export. Currently, crude oil exports through Yanbu Port have reached 5 million barrels per day. In addition, Saudi Arabia exports approximately 700,000 to 900,000 barrels of refined petroleum products per day.
Saudi Aramco's maximum sustainable production capacity is 12 million barrels per day, but its current actual output is limited by OPEC+ quotas, averaging between 10 million and 10.5 million barrels per day. Existing land pipelines alone are insufficient to fully fill the capacity gap caused by the obstruction of navigation through the Strait of Hormuz.
III. Expansion Plan: Adding 2 million barrels/day of shipping capacity and establishing a multinational cooperation framework.
Core Expansion Goal: According to sources, Saudi Arabia is considering expanding the pipeline's capacity by up to 2 million barrels per day. It is unclear whether Saudi Aramco plans to upgrade existing infrastructure or build a new pipeline. One source stated that the capacity increase would include a smaller second oil pipeline.
Progress in consultations with neighboring countries: Sources say Saudi Arabia has held preliminary talks with some of its neighbors regarding access to the pipeline system. Kuwait, Bahrain, and Qatar all lack routes around the Strait of Hormuz, while the Iraq-Turkey pipeline is operating far below capacity due to disputes and repeated shutdowns.
Sheikh Nawaf al-Sabah, CEO of Kuwait Petroleum Corporation, stated clearly at the Atlantic Council's Global Energy Forum last month: "We are in discussions with our brothers in Saudi Arabia and the UAE about how to expand their existing pipeline systems to accommodate Kuwait's oil."
Project Scale and Challenges: Sources say the expansion project could increase capacity to 1 to 2 million barrels per day, with refined petroleum products also under consideration. The sources also indicate the project will take several years, cost billions of dollars, and require reform of Saudi Arabia's crude oil pricing mechanism.
Qatar's predicament: Sources say Qatar, a major exporter of liquefied natural gas, is facing greater technical hurdles and is considering several potential alternatives, including transporting it through Saudi Arabia's pipeline system.
IV. Regional Landscape: The Race to Bypass the Gulf States
The UAE's first-mover advantage: The UAE is the only country in the Gulf region with considerable Hormuz bypass capacity and has completed half of the construction of a new West-East Oil Pipeline. This pipeline, scheduled to be operational in 2027, will double Fujairah's crude oil transport capacity. The UAE's existing Abu Dhabi oil pipeline has a daily transport capacity of 1.8 million barrels. Furthermore, the UAE is planning a new pipeline to double the existing daily capacity from 1.8 million barrels to 3.6 million barrels.
Iraq's alternative attempt: Iraq has "opened up" a land-based oil pipeline connecting the northern Kurdistan Region with the southern Turkish port of Ceyhan, with an initial capacity of 250,000 barrels per day. The Iraqi Ministry of Oil also announced the restoration of a previously idle land-based oil pipeline, with an initial capacity of 350,000 barrels per day and a final target of 400,000 barrels per day.
Regional pipeline construction boom: During the current Middle East conflict, several new pipelines are planned to transport Middle Eastern crude oil to Mediterranean ports via Turkey and Syria, reshaping the regional energy logistics landscape.
V. Market Impact and Competitive Landscape
Oil Prices and Market Reaction: With the resumption of navigation in the Strait of Hormuz, oil exports from the Gulf region rose in June. According to Kpler data, total crude oil and condensate exports from Saudi Arabia, the UAE, Kuwait, Iraq, and Iran increased by more than 3.5 million barrels per day compared to May, reaching 10.07 million barrels per day. Brent crude oil recently fell back to around $70 per barrel.
However, recovery is not yet complete. As of the end of June, the daily traffic volume in the Strait of Hormuz had only recovered to about 57% of pre-conflict levels. Since the ceasefire on June 17, Saudi Arabia has transported approximately 34 million barrels of crude oil through the Strait of Hormuz, but commercial traffic volume remains at about one-third of pre-war levels.
The competition between Saudi Arabia and the UAE: An industry insider stated that Saudi Arabia's expansion "suggests that the next phase of competition between Saudi Arabia and the UAE after the war may be a race to produce oil, and therefore a race to the price." Both countries are accelerating the construction of alternative export routes.
Strategic significance assessment: “The recent negotiations between Saudi Arabia, Kuwait and Qatar on a new oil pipeline corridor reflect a broader strategic reality. This conflict has made countries in the region more aware of the risks of relying solely on Hormuz,” said Zaid Belbaj, managing partner of London-based Hardcastle Consulting.
Editor's Summary
The expansion plan for Saudi Arabia's East-West oil pipeline is a landmark event in the strategic restructuring of energy infrastructure in the Gulf region. From a data perspective, the current full-capacity operation of 7 million barrels per day has clearly exposed the vulnerability of a single pipeline – even operating at full capacity, it cannot completely replace the nearly 20 million barrels per day transport capacity through the Strait of Hormuz. While the additional 2 million barrels per day of capacity cannot fundamentally solve the capacity gap, interconnection with pipelines from Kuwait, Qatar, and other countries will build a more resilient export network at the regional level.
From a competitive perspective, the race between Saudi Arabia and the UAE over bypass routes has evolved from an emergency response into a long-term strategic game. This will not only affect the distribution of energy power within the Gulf, but will also reshape the global crude oil trade flow and pricing mechanism.
From a time perspective, the fact that this project took several years and cost billions of dollars means that regardless of how the situation in the Strait of Hormuz evolves, the strategic investment of Gulf oil-producing countries in alternative routes has become an irreversible trend. The global energy market needs to face this structural shift squarely—bypassing the Strait of Hormuz is no longer just a crisis response solution, but a permanent component of the Gulf energy export system.
Frequently Asked Questions
Question 1: How much crude oil can Saudi Arabia's existing East-West oil pipelines currently transport per day?
A: As of the first quarter of 2026, the Saudi East-West Pipeline/Petroline had reached its maximum transport capacity of 7 million barrels per day. Of this, approximately 2 million barrels are supplied to refineries on the Saudi west coast, and the remaining approximately 5 million barrels are exported via the Red Sea port of Yanbu. The pipeline is approximately 1,200 kilometers long, connecting the main oil-producing region in the east with the western Red Sea coast.
Question 2: Why does Saudi Arabia want to expand this pipeline?
A: The direct cause is the near-disruption of shipping through the Strait of Hormuz following the US-Iran war that erupted in February 2026. Iran's de facto control of the strait forced Gulf oil-producing countries to halt production by up to 12 million barrels per day. The expansion aims to increase shipping capacity around the Strait of Hormuz, providing a more reliable export route for Saudi Arabia and its neighbors (such as Kuwait, Bahrain, and Qatar, which lack alternative routes).
Question 3: What is the specific scale of the expansion plan? Which countries are involved?
A: According to sources, the expansion plan aims to add 1 to 2 million barrels per day of transportation capacity. Saudi Arabia has held preliminary consultations with some neighboring countries. The CEO of Kuwait Petroleum Corporation has publicly confirmed that discussions are underway with Saudi Arabia and the UAE to expand the existing pipeline system to accommodate Kuwaiti oil. Qatar is also considering alternatives to transporting liquefied natural gas via Saudi pipelines.
Question 4: What is the current navigation status of the Strait of Hormuz?
A: As of early July 2026, the daily traffic volume in the Strait of Hormuz had only recovered to about 57% of pre-conflict levels. Since the US-Iran ceasefire on June 17, Saudi Arabia has transported approximately 34 million barrels of crude oil through the strait, but commercial transport volume remains at about one-third of pre-war levels. Independent tanker operators still face war risk insurance premiums that are about eight times higher than before the conflict.
Question 5: What does this expansion plan mean for the global energy market?
A: This plan marks a shift in the Gulf oil-producing nations' strategic investment in alternative export routes from emergency response to long-term planning. Even if the Strait of Hormuz is fully reopened to navigation, the competition between Saudi Arabia and the UAE over bypass routes has evolved into a protracted struggle. This structural shift will affect global crude oil trade flows, the distribution of energy power within the Gulf, and international oil pricing mechanisms. The project's multi-year duration and billions of dollars in cost indicate that bypassing Hormuz is becoming a permanent component of the Gulf's energy export system.
At 15:19 Beijing time, Brent crude oil was trading at $72.83 per barrel.
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