Saudi Arabia is in preliminary talks with several Gulf neighbors to expand the capacity of its East-West crude oil pipeline, a move that would let the kingdom and its neighbors bypass the Strait of Hormuz entirely and blunt one of Iran's most powerful sources of leverage over the region.
According to Reuters, which cited five sources close to the matter, Saudi Arabia is discussing adding one to two million barrels per day of additional capacity to the pipeline, which currently carries up to seven million barrels per day from the kingdom's eastern oil fields to the Red Sea port of Yanbu. Roughly five million of those barrels are earmarked for export, while about two million supply refineries along the kingdom's west coast, according to Aramco CEO Amin Nasser. It remains unclear whether the expansion would involve upgrading the existing pipeline or building an entirely new one, though one source said the plan may include a smaller secondary line dedicated to refined petroleum products.
The talks are driven directly by the war's disruption of Gulf oil exports. Iran's blockade of the Strait of Hormuz forced regional producers to shut in as much as 12 million barrels per day at its peak, sending prices surging. Iraqi output collapsed from 4.3 million barrels per day to under 1.5 million in May, Kuwait declared force majeure in March, and Bahrain's Sitra refinery was struck by Iranian missiles multiple times. Kuwait, Bahrain, and Qatar all lack any land based route that bypasses the strait, unlike Saudi Arabia and the UAE. Kuwait Petroleum Corporation CEO Sheikh Nawaf al-Sabah said discussions are underway with Saudi Arabia and the UAE to route Kuwaiti crude through their existing pipeline networks.
The UAE, the only other Gulf state with meaningful bypass capacity, has already completed half of a new pipeline that will double its export capacity to the port of Fujairah once finished next year. Zaid Belbagi, managing partner at the London based Hardcastle Advisory, said the recent talks reflect a broader strategic reality, arguing that the conflict has focused regional thinking on the risks of relying solely on Hormuz. Industry sources say expanded capacity from both Saudi Arabia and the UAE could eventually spark a new commercial rivalry between the two over oil output and pricing, though Aramco has not yet decided whether to upgrade its existing pipeline or build a parallel one.
