Can New Oil Pipelines, Alternative Routes Make Strait Of Hormuz Irrelevant? Reality Check

Last Updated:April 09, 2026, 12:16 IST

Hormuz may become less central to Iranian strategy, but it is far from irrelevant to the global economy

If there’s one thing the world has learnt from the recently paused Iran war, it is the significance of the Strait of Hormuz. Nestled between Iran and Oman, the narrow chokepoint sees roughly 20 per cent of global oil supply and significant volumes of liquefied natural gas (LNG) from the Persian Gulf pass through its waters.

However, recent geopolitical tensions have reignited a debate over how critical Hormuz truly is and whether its dominance over energy flows is weakening.

An opinion piece in Bloomberg suggests that the influence that Iran wields over international energy markets through Hormuz will fade gradually. It notes that countries around Iran have gained valuable lessons from their experiences in previous conflicts. While Saudi Arabia and the UAE have established bypass pipelines to partly avoid the strait and are expected to develop other emergency pipelines in the future, Kuwait is likely to collaborate with other countries in creating alternative pipelines. Additionally, Iraq can bring back its strategic pipeline, which will help transport oil to the Mediterranean region via Turkey.

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The article ends by suggesting that within a few years, Iran will no longer hold hostage the energy supply chain. Within five years, the Persian Gulf may have many more bypass pipelines, rendering Hormuz “never as important to the global economy as it was at the start of the conflict".

Reality Check

Although the Bloomberg piece captures the emergence of a trend, the statement regarding the reduced economic importance of Hormuz on a global scale should be clarified.

Hormuz Still Transports Enormous Quantities of Oil

The fact that there are pipelines does not diminish the need for shipping through Hormuz; the amount of petroleum transported in ships through Hormuz is significantly larger than what can be shipped through pipelines.

Alternative Routes Limit Risk But Do Not Mitigate It

The use of pipelines from Saudi Arabia and the UAE or other alternative means of transportation through Kuwait and Iraq has the possibility of bypassing some risks but are limited in capacity and expensive to build.

ALSO READ | 12 Ships Per Day, Toll Charges In Crypto: How Iran Plans To Gatekeep Hormuz After Ceasefire

Market Perception Matters

Oil markets react not only to actual disruptions but to perceived risk. Even if pipelines exist, tensions in Hormuz can trigger price spikes, insurance hikes, and shipping delays. Its strategic and symbolic significance remains substantial.

It is correct to argue that Iran may be losing its absolute power in terms of controlling oil routes as other ways of moving energy emerge. However, the strait still occupies an important position within the world’s energy system.

This means Hormuz may become less central to Iranian strategy, but it is far from irrelevant to the global economy. Markets, policymakers, and traders will continue to watch the strait closely for years to come.

News explainers Can New Oil Pipelines, Alternative Routes Make Strait Of Hormuz Irrelevant? Reality Check

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