The Strait of Hormuz is rarely far from the headlines these days, but Iran's threat to disrupt shipping through the strait is hardly new. Just over a year after Ayatollah Khomeini came to power in 1979, Iran threatened to halt oil traffic from the Persian Gulf in response to potential U.S. military action. For nearly half a century, Iran has understood the leverage that comes from threatening a narrow passage and has used it often.
While Iran was threatening to close the strait, Saudi Arabia was already working on another way out. Its solution was remarkably straightforward, even if executing it wasn't: build a pipeline more than 700 miles across the Arabian desert.
The Great Escape
Most of Saudi Arabia's oil production is concentrated in the eastern part of the country, near the Persian Gulf. Rather than relying entirely on tankers traveling through Hormuz, Saudi Arabia built a pipeline across the Arabian Peninsula to the Red Sea, allowing its oil to reach international markets without passing through the strait.
The project was authorized in 1978, when Saudi Arabia was already concerned that Iran, then ruled by the Shah, could blockade its oil exports. The urgency only increased when Ayatollah Khomeini came to power the following year. The first tanker carrying oil through the pipeline departed in 1981, during the Iran-Iraq War. Saudi Arabia had recognized the vulnerability before its full consequences became apparent.
Over the following decades, Saudi Arabia expanded the system. Today, at maximum capacity, the pipeline can transport roughly 70% of the country's daily crude oil production, giving Saudi Arabia something few of its neighbors have: an alternative route capable of carrying most of its oil.
Think about that investment. For more than four decades, Saudi Arabia developed an enormous piece of infrastructure whose greatest value might emerge only when Iran decides to turn up the pressure. It wasn't designed to eliminate geopolitical risk. It was designed to provide another option.
Different Strokes
Saudi Arabia wasn't alone in recognizing the vulnerability of the Strait of Hormuz. But its neighbors faced different circumstances, and their responses tell three very different stories.
UAE — The Bypass. In 2012, the United Arab Emirates opened a pipeline connecting its oil-producing region near Abu Dhabi to the Gulf of Oman, bypassing the Strait of Hormuz. At maximum capacity, the pipeline can transport roughly half of the UAE's daily oil production.
Oman — The Natural Advantage. Oman's major oil-export terminals are already outside the Strait of Hormuz, so it doesn't need to build a pipeline around it. Sometimes geography provides the alternative without requiring an enormous infrastructure investment.
Qatar — The Structural Trap. One of the world's largest exporters of liquefied natural gas (LNG), Qatar faces a difficult geographic challenge. Every LNG tanker leaving its export facilities must pass through the Strait of Hormuz to reach international markets. LNG can't simply be pumped through an ordinary pipeline. Qatar would need to construct an entirely new, multibillion-dollar liquefaction complex at the other end. Neighboring countries have offered to accommodate such a pipeline, but Qatar recently rejected the idea, arguing that duplicating its existing facilities makes little economic sense.
This Is Not a Drill
In 2026, the contingency Saudi Arabia spent decades preparing for became a reality. As conflict with Iran severely disrupted shipping through Hormuz, Gulf producers faced a problem that couldn't be solved by simply producing more oil. They needed a way to deliver it, and Saudi Arabia already had one.
Then came the complication. The alternative route had vulnerabilities of its own, both along the pipeline and in the shipping lanes beyond it.
Enter the Houthis
Reaching the Red Sea solved one problem for Saudi Arabia, but it created another. Tankers leaving its western coast have two choices: head north toward the Suez Canal and Europe, or south toward the Indian Ocean and Asia. Before the latest disruption, roughly 80% of the crude exported from Saudi Arabia's Red Sea terminals traveled south.
That southern route passes through Bab el-Mandeb, a narrow passage off the coast of Yemen. At its narrowest point, it's slightly narrower than the Strait of Hormuz. And along its eastern shore sits the Iran-backed Houthi movement who have repeatedly threatened and attacked commercial shipping.
For Saudi Arabia, the problem was becoming familiar. It had built a pipeline across the desert to avoid one vulnerable strait, only to find that most of its oil still needed to pass through another.
On July 20, the Houthis declared that Saudi vessels would no longer be allowed to pass. This wasn't just a threat. Within days, the Houthis claimed attacks on Saudi oil tankers they accused of violating the blockade. Then, on September 11, drones launched from Iraq struck Saudi Arabia's East-West Pipeline, damaging pumping stations and forcing a temporary shutdown. By October 6 the pipeline was back to more than 80% capacity. The backup had been attacked, but it was moving oil again within weeks. The episode demonstrated both the vulnerability of the alternative route and its ability to recover.
The Really Long Way Around
As the Houthi threats increased, Saudi crude destined for Asia began taking a route that seems almost absurd until you consider the alternatives. Instead of sailing south from the Red Sea coast, tankers headed north through the Suez Canal, crossed the Mediterranean, passed Gibraltar, traveled down the Atlantic coast of Africa, rounded the Cape of Good Hope, and then headed east across the Indian Ocean toward Asia.
Consider what that means. Under normal circumstances, an illustrative shipment to Asia might take 18 days through Hormuz. Saudi Arabia's pipeline and Red Sea route would add only about a day, bringing the journey to 19. But avoiding the Houthis could stretch that same trip to approximately 48 days. What began as a remarkably efficient alternative to Hormuz had become a voyage taking more than two and a half times as long.
With Saudi tankers largely avoiding Bab el-Mandeb, the extraordinary journey around Africa is becoming the preferred route for oil headed to Asia from Saudi Arabia's Red Sea terminals. The consequences extend beyond the additional fuel and transportation costs. Nearly three times as many days at sea means more tankers are needed to deliver the same amount of oil. Saudi Arabia has found a way to keep its oil moving, but at a substantially higher cost.
Where Do We Go from Here?
So where does this go? The recent Houthi missile strike on Riyadh's international airport demonstrates how far the conflict has moved beyond oil pipelines and shipping lanes. Saudi Arabia has responded in part by activating a mutual defense agreement with Türkiye and Pakistan, bringing two additional regional powers into its security calculations. I see two broad paths forward.
Path A: Deterrence Takes Hold. The defense agreement begins to deliver meaningful results. Additional air defenses, intelligence sharing, and military cooperation make attacks on Saudi infrastructure, airports, and shipping increasingly difficult and costly. Houthi attacks begin to decline, and Iran recognizes that continued pressure on Saudi Arabia is producing diminishing returns. As the threat recedes, oil shipments become more predictable, regional tensions ease, and Iran eventually returns to the negotiating table with a credible path toward ending the broader conflict.
Path B: The Conflict Spreads. The Houthis continue expanding their attacks beyond shipping and energy infrastructure, targeting Saudi cities, airports, and other critical facilities. Iran maintains its pressure through missile strikes, naval mines, and coordination with allied armed groups, including the Houthis. Rather than backing down, Tehran continues using threats against America's regional partners to increase the economic and political cost of the conflict. Saudi Arabia responds more forcefully, potentially drawing Türkiye and Pakistan into a broader confrontation. What began as a struggle over shipping routes becomes a regional war, with or without direct U.S. involvement.
The next few months may tell us more than the last few weeks. If attacks decline, the new defense arrangements may be creating room for diplomacy. If they intensify, the conflict could draw in countries that have so far remained largely on the sidelines.
The question is no longer whether Iran can disrupt the flow of oil. It's how far the conflict will spread before someone decides the price is too high.