## Logistics Challenges and Prospects for New Oil and Gas Export Routes Bypassing the Strait of Hormuz

### Logistical Difficulties and Strategic Projects

British shipping broker Alibra Shipping has reported significant logistical challenges associated with plans to build a deepwater oil pipeline connecting the Persian Gulf to India, bypassing the Strait of Hormuz. This project could reshape the regional landscape, as the Strait of Hormuz is a critical transport chokepoint through which about 20% of global oil and liquefied natural gas exports pass. Currently, the strait is effectively closed due to the conflict between the US and Iran, which has a substantial impact on global energy markets.

In May, British engineering firm Peritus International received a contract from India's South Asia Gas Enterprises (SAGE) to conduct a feasibility study for constructing a pipeline from the United Arab Emirates under the Arabian Sea. The company noted that this order came amid increased pressure on the Persian Gulf's energy infrastructure and ongoing disruptions in the Strait of Hormuz, highlighting the vulnerability of maritime energy supply routes in the region.

### Indian Imports and Supply Stability Risks

India ranks third globally in crude oil imports. Despite a significant increase in purchases from Russia in recent years, about 40% of India's oil imports still transit the Strait of Hormuz. Disruptions in this region have raised concerns about supply stability and pricing, as well as underscored the systemic risk of relying on a single maritime chokepoint for one of the world's largest and fastest-growing economies.

Peritus conducted a feasibility study for the construction of the 1,200-kilometer Middle East to India Deepwater Pipeline (MEIDP) from the Persian Gulf to India. The study examined complex deepwater sections, such as the Indus Fan and Owen Fracture Zone—major geological formations under the Arabian Sea that complicate the construction of an underwater pipeline. The proposed oil pipeline faces additional challenges due to extreme depths and operational requirements for transporting crude oil.

The MEIDP gas pipeline could reach the coast of Gujarat at depths of up to 3,450 meters, making it one of the deepest offshore pipeline systems in the world. Construction is expected to take five to seven years, with commissioning possible between 2031 and 2033. The project's estimated cost is around $4.7–4.8 billion. Meanwhile, India's Ministry of Petroleum and Natural Gas announced in June that there are no official proposals or active negotiations on this matter.

### Alternative Routes and Export Opportunities

In July, crude oil exports from Oman to India totaled 133,000 barrels per day, significantly lower than the 883,000 barrels per day in May and 747,000 barrels per day in June. British broker Gibson noted that Persian Gulf producers still lack sufficient alternative export routes, as shipments via the Red Sea are subject to attacks.

Iraq has access to the Mediterranean Sea through Turkey and transports fuel oil via Syria, but remains vulnerable to regional politics and bilateral relations. Regional producers continue to expand export capacities outside the Strait of Hormuz, and monitoring the development of these projects is crucial for assessing long-term tanker demand trends.

Saudi Arabia is considering increasing the capacity of its pipeline to the Red Sea by 2 million barrels per day. Kuwait is negotiating to expand its system to boost its own oil exports. The UAE is building a second pipeline to Fujairah, which will double capacity to 3.6 million barrels per day and provide additional insurance in case of disruptions in the Strait of Hormuz. The pipeline is expected to be operational by the end of 2027 after the completion of port infrastructure.

### Impact on the Tanker Market and Infrastructure Security

A key question remains: which pipelines will actually be built and at what capacity will they operate? Until this year, exports from Yanbu on Saudi Arabia's Red Sea coast rarely exceeded a third of total capacity. A similar situation may arise with Iraqi pipelines heading west, which will mainly serve the European market.

Asian buyers typically prefer to load in the Persian Gulf, and since most demand growth is in the East, western export routes are likely to be underutilized. The impact on the tanker market in the UAE will be limited. If exports eventually shift entirely to Fujairah, there may be a slight decrease in demand, but this will likely be offset by increased production in the Emirates.

The greatest impact is expected on tankers transporting Iraqi oil to Europe on VLCC and suezmax vessels, which in 2025 averaged about 700,000 barrels per day. The effect on the product tanker market will likely be minimal, as only Saudi Arabia is considering building a product pipeline to the Red Sea.

The tanker market itself will be less vulnerable to cargo losses if uncertainty persists for years. However, pipelines face security challenges—they are difficult to protect, especially in countries with active insurgent groups and externally supported armed formations. Modern technologies, such as inexpensive drones, lower the threshold for disrupting exports.