Kuwait is actively exploring the possibility of building crude oil pipelines to bypass the Strait of Hormuz, with Oil Minister Tariq Sulaiman Al-Roumi stating that the country is "currently looking for the best and most cost-effective option." As reported by Arab News Japan, any such project would be "huge" and vastly expensive, with two possible routes under discussion. One proposed route would connect Kuwait to the Red Sea through Saudi Arabia via the 1,000+ km pipeline to Yanbu port, requiring massive tunneling operations or pumping stations to navigate the Sarawat mountain range. Another option could run to the UAE's Fujairah port, covering over 1,200 km and requiring a three-way agreement between Saudi Arabia, UAE, and Kuwait. However, analysts note that even when complete, these pipelines would still not match the capacity of seaborne routes, with over 20 million bpd of crude and petroleum liquids passing through Hormuz in 2025. The 364 km pipeline carries just 20 billion cubic meters of natural gas annually, a fraction of Qatar's usual exports of 110 bcm. Building pipelines with sufficient capacity to replace specialist LNG tankers would require extensive cryogenic storage infrastructure and dedicated regasification terminals throughout the supply chain.
Kuwait is exporting approximately 1 million barrels of crude oil daily through multiple strategic routes, including ship-to-ship transfers outside the Strait of Hormuz, as reported by Bloomberg. State-owned producer Kuwait Petroleum Corp. is delivering cargoes directly to customers using both its own tankers and chartered vessels. According to Shaikh Khaled Al-Sabah, managing director for international marketing, the company is navigating the Hormuz challenges through these innovative approaches. The recovery comes as more tankers find ways to navigate the waterway, demonstrating the resilience of global energy supply chains. Kuwait's crude shipments have recovered to almost two-thirds of the 1.6 million barrels a day it exported on average last year, as reported by Bloomberg. Exports had slumped to multiyear lows after the Iran war began in late February, but the country is now able to "supply all of our customers, but some volumes are not the same as before," as Shaikh Khaled noted at the Asia Pacific Petroleum Conference by S&P Global Energy in Singapore.
Buyers will have to pay more for KPC to deliver crude outside Hormuz to compensate for transit risks, while those taking cargoes inside the Persian Gulf will receive discounts, according to Shaikh Khaled at the Asia Pacific Petroleum Conference by S&P Global Energy in Singapore. This pricing structure reflects the increased operational complexity and risk associated with alternative shipping routes. The adjustments are necessary as producers find ways to ship oil to customers through one of the world's most important energy corridors amid ongoing geopolitical tensions.
Oil flows through the Strait of Hormuz are recovering, though still significantly below pre-war levels. Vitol Group estimates daily flows at about 10 million barrels, including 9 million of crude, while Macquarie Group estimated volumes at about 7 million barrels a day of crude and refined fuels. That's still less than half the 20 million barrels a day that transited the waterway before the war began. Following an attack in July on the Jizan Refinery, located on the Red Sea coast near the border with Yemen and with a crude processing capacity of approximately 400,000 barrels per day, oil shipments declined significantly, with no exports reported in August. Ship-to-ship transfers, the so-called shuttle trade, have become increasingly popular as producers find ways to navigate the waterway amid ongoing geopolitical tensions. The control of Hormuz remains a key point of contention, with Iran having said an agreement with Oman to manage shipping through the strait is imminent. According to a 2025 UN Trade and Development review, more than 30 million TEU containers passed in and out of the Strait of Hormuz, bound for ports such as Dubai's Jebel Ali, with 48 oil tankers, 24 container ships, and 18 bulk carriers among the average of 144 ships per day.
Kuwait is evaluating alternative pipeline routes for crude exports, including through Saudi Arabia and the United Arab Emirates, according to Shaikh Khaled's statements. The country also plans to ramp up refinery runs to boost fuel supplies as markets for products including diesel remain tight, as reported by Bloomberg. These strategic initiatives demonstrate Kuwait's commitment to maintaining operational flexibility amid ongoing geopolitical challenges in the region. With Washington and Tehran in a stalemate, Persian Gulf producers are finding ways to ship oil to customers through one of the world's most important energy corridors, with ship-to-ship transfers becoming increasingly popular while producers also explore pipelines that bypass Hormuz altogether. Markets do not expect a full return to pre-war oil shipment levels before late in the first quarter or early in the second quarter of 2027, with analysts having begun revising their oil price forecasts upward citing expectations that the Middle East crisis could extend into 2027. However, analysts express doubts about whether such pipeline networks can come online in time to have any impact on the current crisis, whether the capacity of such pipelines could ever match that of the tanker fleet, and even whether oil companies currently considering investing in them will pull out if Hormuz is freed up again before work begins.
