Middle East. Are Arab alternatives to the Strait of Hormuz in demand?

Saudi in Arabia to remember are prince Salman name of shipping of the canal long ago of the project about

Maintaining the tense situation in the Strait of Hormuz, through which about 20 percent of the world’s oil supplies pass, is fraught with the collapse of energy markets, Saudi Aramco CEO Amin Nasser said on March 10. “The longer the disruptions continue, the more catastrophic the consequences will be for the global oil market and the global economy.” In 2025 results, the Saudi oil giant reported a 12 percent drop in profits due to weak demand.։

From Persia of the bay countries profit dependent will be Hormuz through the strait of navigation from restart. Supply long lasting interruptions can are influence most diverse sectors վրա՝ from aviation and: from agriculture until production and: navigationNasser warns.

Meanwhile From Persia in the bay of the conflict aggravation and: Hormuz of the strait actually blocking to the landscape Saudi Arabia in March restart is (9 year after) Salman strategic navigable of the canal (King Salman Canal) of the project processing: Saudi management ambitious the initiative in line with is «visionary 2030» of the program to logic, which is a national plan to diversify the economy with a gradual decrease in dependence on the export of energy resources. (aThis initiative is often linked s:with the larger ecosystem of Audi megaprojects such as the Neom project, which includes the 170km long The Line m:the construction of an ego city overlooking the Red Sea orand: its scale in recent years significantly reduced is and: It could even possibly be completely scrapped. Economic justifications for the huge costs involved the creation of new value chains in logistics, shipbuilding, industrial processing, irrigated agriculture. and: in the fields of tourism. According to some studies, desalinated water could be used to support agro-industrial centers in the desert, which would strengthen the country’s food security. Saudi Arabia already produces a significant proportion of its water consumption through desalination, which implies environmental consequences associated with waste disposal and high energy consumption).

The project, worth up to 250 billion dollars, involves the construction of an alternative trans-Arab waterway from the Persian Gulf (Dammam oil port) to the Red Sea (north of Yanbo). The final feasibility study of the project is expected to be presented in the fall of this year. The geopolitical rationale is to strengthen the Middle East’s transit role as a global logistics hub for trade between East and West.

The canal concept, which was first discussed in 2014-2015, envisages the construction of a 950-960 km artificial waterway that will cross the kingdom from east to west. According to the technical standards, which have been reconfirmed in expert circles, the width of the canal operation should be approximately 150 meters and the depth – 25 meters. These standards ensure the passage of large capacity tankers and container ships transiting the Strait of Hormuz.

The direct costs of hydrotechnical infrastructure (earthworks, dredging, bank strengthening, etc.) will amount to 80 to 100 billion dollars. In addition, the comprehensive development of the route area, including the construction of adjacent ports, railway approaches, highways and the creation of a special economic zone along the highway, increases the final estimate to $250 billion.

The canal will mainly pass through the Rub el Khal sand desert, which is one of the largest in the world. An eastern entry point is assumed to be in the area of ​​the industrial/terminal clusters of Dammam and Jubail on the Saudi coast of the Persian Gulf. According to available information, the project is supported by Kuwait and Bahrain.

An alternative, more ambitious version of more than 1,200 km long involved the canal’s exit from Dammam to the Gulf of Aden (through South Yemen). Due to extremely high capital investment and political factors, including the need for lengthy negotiations and approvals with neighboring countries, this project was shelved in the mid-2010s.The King Salman Canal is considered not only as a shipping route, but also as an integration of the trans-Arab multifunctional transit and logistics corridor.

To remind, the following major pipelines bypassing the Strait of Hormuz are currently in operation.

• Trans-Saudi oil pipeline through the same Rub el Khal desert (East-West Pipeline), which stretches about 1,260 km from a cluster of mines in the predominantly Shiite Eastern Province and the city of Abkeik to the Red Sea port of Yanbo. Capacity: 5 million barrels per day. As of the first ten days of March, the available capacity is approximately 2.5 million barrels per day. According to Nasser, the pipeline is expected to be fully utilized by transporting additional supplies, including storage stocks, to the port of Yanbo. Just Yanbo, Financial Times with data, 30 large tonnage tankers of the VLCC class, each of which can transport more than 2 million barrels of oil, will soon depart. The owners of the ships include Dynacom Tankers, Minerva Marine, Frontline, as well as the Chinese state-owned company Cosco. Some of the tankers fulfill Saudi Arabia’s long-term supply contracts, mainly to China, partly to India and South Korea. 

• Emirati ADCOP from North West UAE to Emirati Port of Fujairah on the Arabian Sea: The capacity is 1.8 million barrels per day, of which about 700,000 barrels are available per day.

• The 170-kilometer Al Haba (UAE) oil pipeline leading to Sohar port in northern Oman has an average capacity.

According to the IEA’s estimates, these bypasses together allow the pumping of approximately 3.6-5.6 million barrels of oil per day, that is, less than 30% of the monthly transportation through the Strait of Hormuz until February 28, 2026.

Plans have been announced in 2023-24 to increase the capacity of these pipelines and build about 650 km of new pipelines from Qatar through the border regions of Saudi Arabia to the terminal in Oman (near Muscat) and a branch of about 600 km from the East-West pipeline to Al-Humaida in Saudi Arabia on the Gulf of Aqaba near the Suez Canal. the port.

There were also reports of connecting Kuwait and Rumaila to that pipeline in southern Iraq, but before the current war, nothing was heard of the implementation of these projects in the region (As late as June 1957, the then Prime Minister of Iraq, Nouri al-Said, to the British authorities of “Treaty Oman” (later UAE) suggested Develop a project for an oil pipeline or sea canal across the Strait of Hormuz via the Omani land bridge, believing that over time the volume of oil shipments will be unlikely to pass through the strait, creating tanker traffic jams in both directions. The British considered this proposal untimely. A similar proposal was made by Shahnshah Pahlavi to the British and the fledgling emirates, followed by “that this is not a matter of the immediate future”).

Answering the question about the possible escorting of ships carrying oil by American warships, the head of Saudi Aramco said: “will support any action or measure that will help bring our products to customers.”

However, such steps will only increase the tension and will in no way affect Iran’s determination to adequately respond to the aggressors, including within the framework of “asymmetric” operations. It must be assumed that any alternative projects, pipelines, canals and other infrastructure facilities will also not be neglected, which testifies March 8 the incident, and not only that։

Earlier we wrote: With the aggression against Iran, the USA and Israel have largely “pulled” their partners from the Gulf Cooperation Council, where up to 90% of food and other basic products of daily demand are imported, and there is no doubt that they will be convinced of this more than once.

According to some observers, the protracted conflict could lead to stagflation, a combination of slowing economic growth and high inflation, which would hardly bring the King Salman Canal and other similar projects closer to completion.

DMITRI NEFYODOV

fondsk.ru

Translation by Zhanna Avetisyan

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