The disruption of the Strait of Hormuz poses a major threat to the economic security of the Gulf Cooperation Council (GCC) states, which remain heavily dependent on hydrocarbon export revenues. As a result, developing alternative export routes to reduce reliance on the Strait has become an urgent priority.
Although there is an urgent need to secure the Strait’s rapid reopening, Gulf leaders must also consider the longer-term implications of Iran’s ability to disrupt it. Tehran’s capacity to threaten an energy chokepoint through which 20 per cent of global petroleum liquids passes provides Iran with sustained leverage over Gulf states’ primary source of national income. GCC states without alternative waterways to the Strait – Qatar, Kuwait and Bahrain – will find it more difficult to mitigate disruption than those whose geography extends beyond it, such as Saudi Arabia, Oman and the UAE. For these countries, increased investment in pipeline or port infrastructure is not enough on its own: a long-term policy solution cannot be reached unilaterally, and requires sustained coordination with their neighbours at a time when regional political unity is steadily weakening.
The Iran war should serve as a call to action for policymakers to enable and strengthen intra-GCC coordination to safeguard the region’s collective economic security.
Uneven impacts of Strait closure across the Gulf
The economic impact of the Strait’s closure has been uneven across the GCC. Goldman Sachs forecasts released in March 2026 projected Oman and Saudi Arabia would be least affected, with GDP declines below 2 per cent and 5 per cent, respectively. Oman is less exposed because it lies outside the Strait, while Saudi Arabia can reroute much of its oil through the East-West Pipeline from the Eastern Province to Red Sea ports.
Built to bypass the Strait during the 1980s Iran–Iraq War, the East-West pipeline has proven strategically important. It is now operating near its 7 million barrels per day (bpd) capacity, still short of Saudi Arabia’s pre-war output of around 10 million bpd, though higher oil prices have generally offset lower export volumes.
The UAE has similarly used the Abu Dhabi Crude Oil Pipeline to bypass the Strait, transporting around 1.8 million bpd from Abu Dhabi to the port of Fujairah. A new pipeline, expected to be completed by 2027, will add a further 1.5 million bpd in capacity and allow the UAE to maintain practically all of its pre-war export volume of 3.4 million bpd.
Saudi Arabia and the UAE were able to develop these export routes unilaterally because their geography gives them access to coastlines other than the Strait. However, Kuwait, Qatar and Bahrain have no such geography to draw on, and have already experienced significant economic impact, with the same forecasts anticipating GDP declines of around 8 to 10 per cent depending on the duration and severity of the conflict.
Kuwait, a major oil exporter, did not export any crude oil for an entire month – the first time this has happened in 30 years. Qatar, among the world’s largest exporters of liquefied natural gas (LNG), also faced severe disruption: typical exports of 5.8 to 7.3 million tonnes of LNG per month fell to just four cargoes, totalling around 0.8 million tonnes, in March 2026. Bahrain, which relies on a single major refinery for its refined petroleum exports, was forced into shipment suspensions with no alternative route available.
Viable options for rerouting energy depend on GCC-wide cooperation
To bypass the Strait, Kuwait, Qatar and Bahrain will need to rely on neighbouring countries’ infrastructure. This will require a multilateral approach. GCC states have already cooperated on cross-border energy infrastructure: existing pipelines transfer energy between member states, including the Saudi–Bahrain crude oil pipeline, which supplies Saudi crude to Bahrain for domestic use and refining, and the Dolphin Gas pipeline, which transports Qatari natural gas to the UAE and Oman.
Historically, GCC states have proposed several pipeline schemes to bypass the Strait. One example is the Gulf–South Asia pipeline, designed to carry Qatari natural gas through the UAE and offshore to Pakistan’s Gadani port. Another project often discussed in regional energy-security literature is a Qatar–Egypt pipeline that would pass through multiple GCC states and potentially connect Gulf natural gas supplies to Egypt and onward to European markets. However, many of these projects stalled due to a combination of factors, including regional conflicts like the 1990–91 war, and political rivalries and trust deficits among regional states.
There are several options for mitigating the current disruption of the Strait that require intra-GCC cooperation. Qatari LNG is difficult to reroute due to technical constraints, but some proposals suggest expanding overland pipelines to Oman and the UAE, where gas could be processed and exported via alternative ports. This would likely require both countries to expand their LNG processing capacity to match Qatar’s export volumes.
Bahrain’s 400,000-bpd refining capacity is around three per cent of Saudi Arabia’s output, so it could be integrated into Saudi Arabia’s pipeline system without strain. A swap arrangement within a shared regional pool is another option, using mechanisms that already exist.
Kuwait’s previous export route via a pipeline to Iraq was decommissioned after the 1990 invasion. Routes via Iraq and Turkey exist in theory, but a GCC pipeline through Saudi Arabia would be more politically stable and is likely the most viable option given current regional uncertainty. A Saudi transit route was considered in the 1980s but not pursued at that time. Kuwait would still need detailed feasibility studies, but transit through Saudi Arabia remains the most realistic long-term export route.
Towards a GCC framework for energy logistics integration
Mitigating the risks of disruption to the Strait is not simply a national priority but a regional imperative. The region’s economic stability depends upon the collective resilience of all member states. Gulf states have provided one another with financial backing and economic assistance during past periods of crisis, in recognition that a serious shock to any one of them would be felt across the bloc. Thus, recognising that a threat to one GCC state’s economic security can affect the wider bloc justifies cooperation to ensure all GCC states have alternative options to bypass the Strait for economic resilience.
However, many of the proposed solutions mean some GCC states placing their primary source of national income in the hands of regional partners. Irrespective of the current state of intra-GCC relations, this represents a significant concession of economic autonomy to other member states, and can only function sustainably through a regional framework capable of building trust, establishing common rules and creating long-term political confidence between member states. Few institutions are better placed to lead intra-GCC coordination than the GCC’s General Secretariat, which remains the most viable framework through which Gulf states can collectively manage shared energy security challenges.
A GCC-wide framework for energy logistics and transportation integration would help establish common rules, coordination mechanisms and long-term regional precedents for the development and protection of pipelines, shipping routes and interconnected energy infrastructure. Such coordination would not only strengthen collective energy security but also reinforce regional economic stability, integration and resilience against future geopolitical disruption.