The Strait of Hormuz is effectively shut. Iran’s chokehold on the world’s most critical oil chokepoint has strangled exports from the Persian Gulf. Now, Iraq and the United Arab Emirates are racing to build their way out.
Iraq and the UAE are fast-tracking plans to expand oil pipelines to replace the capacity lost by the closure of the strait, as new data reveals their stark dependency on the Persian Gulf. Oil comprised over half of Iraq’s GDP in 2025. But with Hormuz closed, that revenue has virtually dried up.
Iraq announced in a press conference on May 16 that it had exported just 10 million barrels of oil through the Strait of Hormuz in April. Before the war, that number was 93 million barrels. A 90% collapse.
“Iraq is in a much more complicated situation because we know that most, if not all, of its oil, transits through Hormuz,” Alan Lemangnen, senior economist at QuantCube Technology, told CNBC.
Iraq’s Kurdish Lifeline
Last week, the Iraqi cabinet approved plans to accelerate crude exports through the Kurdistan-Turkey pipeline network. The route offers an alternative passage through Kurdistan to Turkey’s Mediterranean port of Ceyhan.
The plan would more than triple Iraq’s existing shipments through that network from 220,000 barrels per day to 770,000. When operating at full capacity, it should provide some relief to the oil-dependent Iraqi economy.
But 770,000 barrels per day is a fraction of what Iraq used to ship through Hormuz. The country is bleeding revenue. And the pipeline cannot be expanded overnight.
“The UAE still has the Fujairah terminal,” Lemangnen noted. “Even if it has been damaged during the war, it still, in theory, has the infrastructure and vessels to export a large amount of oil.”
Iraq has no such backup.
The UAE’s West-East Pipeline
Abu Dhabi is fast-tracking construction of a new West-East pipeline to Fujairah as it also looks to expand its oil export capacity and bypass the strait. The project, expected to come online in 2027, will double the Abu Dhabi National Oil Company’s export capacity.
Abu Dhabi Crown Prince Sheikh Khaled bin Mohamed bin Zayed Al Nahyan on May 15 called for faster delivery of the pipeline to meet rising global energy demand.
The UAE is in a stronger position than Iraq. It still has the Fujairah terminal on the Gulf of Oman, outside the strait. But even that terminal has come under attack from Iranian drones, disrupting oil loading operations.
Alternatives at Risk
Saudi Arabia’s East-West pipeline, linking processing facilities near the Persian Gulf to an export hub on the Red Sea, was attacked by Iran in April. The UAE’s pipeline to Fujairah has also been targeted.
Together, the two pipelines have an estimated combined capacity of 3.5 to 5.5 million barrels per day, according to the International Energy Agency. Saudi Arabia claims its pipeline is pumping 7 million barrels per day alone.
But flows remain well short of the roughly 20 million barrels of oil and petroleum products that transited through the Strait of Hormuz every day before the war.
The Time Problem
Developing alternative export routes involves not only massive investment in infrastructure but also time. Transnational agreements are necessary when pipelines pass through several territories. Construction takes years. The war is happening now.
Ship transits through Hormuz remain significantly below prewar levels. Traffic through the sea lane fell to the lowest point of the Iran war in May, according to Lloyd’s List.
Vessels stuck in the Gulf risk attack by Iranian forces unless they receive Tehran’s approval to transit a designated route through Hormuz. They also risk US sanctions if they cooperate with Iran. The strait is not just closed. It is a trap.
The Bottom Line
Iraq and the UAE are racing to establish alternative oil pipelines as exports through the Strait of Hormuz have dried up due to the Iran war. Iraq’s oil exports through Hormuz fell from 93 million barrels before the war to just 10 million in April. The country has approved plans to expand the Kurdistan-Turkey pipeline network to 770,000 barrels per day. The UAE is fast-tracking its West-East pipeline to Fujairah, expected online in 2027. But alternatives remain far below prewar capacity, and both existing pipelines have been attacked by Iran.
