“Lebanon Debate” – Basma Atwi
With the return of political and military tension to the region, and with the Strait of Hormuz turning, due to geography and politics, into one of the most prominent geopolitical power cards in the hands of Iran, the threat of its closure became enough to shake global energy markets and force major capitals to reconsider their calculations, and the countries concerned with the movement of trade in the Strait began to search for alternatives and means to weaken its economic and strategic feasibility and strip it of its ability to hold the global economy hostage.
Will they succeed in this, and how long will it take to achieve this?
It is estimated that current alternatives can only accommodate a limited portion of the oil that passes through Hormuz, so the strait will remain one of the most important strategic energy corridors in the world for many years. Given that the current war has already reduced shipping traffic and increased risks for ships, it may accelerate the implementation of these projects, but it does not make Hormuz lose its importance in the near future.
On the oil level, the features of a new energy transfer map have been formed to partially bypass the strait, highlighting the Saudi “East-West” pipelines extending from the oil fields in the east to Yanbu on the Red Sea, with a capacity of 5 million barrels per day, with a plan to raise it to 7 million, and the Emirati “Habshan-Fujairah” pipeline, which transports Abu Dhabi oil directly to the port of Fujairah on the Gulf of Oman outside the scope of the strait, with a capacity ranging between 1.5 and 1.8 million barrels per day. This shock also brought back projects. Regional issues have been postponed to the table, most notably the Iraqi oil pipeline to the Jordanian port of Aqaba, and expanding the use of the Kirkuk-Ceyhan line with Türkiye.
As for alternatives to Hormuz in the coming years, the path can be envisioned in three stages:
Within one to three years: Markets will rely on temporary measures, such as increasing the use of existing pipelines in Saudi Arabia and the UAE, storing larger quantities of oil, and diversifying import sources. But these alternatives can only transport a portion of the quantities that pass through Hormuz.
Within three to seven years: If security risks persist, pipeline projects to Red Sea and Arabian Sea ports will accelerate, and connectivity projects may expand through Turkey, Israel, or Oman depending on political developments. Asian countries’ investments in energy security and alternative energy sources will also increase.
In ten years or more: the importance of Hormuz may decline relatively, but it will not disappear. Even with the completion of the pipeline projects, countries such as Kuwait and Qatar will remain highly dependent on the strait, especially for exports of liquefied natural gas, which is more difficult to reroute than oil.
These projects do not mean completely dispensing with the Strait of Hormuz, as specialized reports confirm the inability of the current routes to fully absorb the huge quantities passing through it, but they give producers and consumers a vital margin of maneuver and greater safety in times of crises.
What about freight transport and international trade lines?
The importance of the Strait of Hormuz to global trade remains greater and in some ways more complex. Ships carrying containers carrying consumer goods, electronics and clothing, cars and spare parts, food and grains, raw materials and chemicals, factory equipment and machinery pass through the strait. Alternatives to Hormuz exist, but they are not complete alternatives. Ports on the Arabian Sea, such as the port of Fujairah in the Emirates and the port of Duqm in the Sultanate of Oman, are located outside the Strait of Hormuz, and goods can be transported to them by land from within some Gulf countries, but this requires extensive logistical networks and increases the cost.
Land and railway corridors, such as the Gulf Railway Project or the India-Middle East-Europe Economic Corridor (IMEC), may reduce dependence on maritime transport in the future, but they will not completely replace it, and some of them are still in the development stages or depend on long-term political stability. Alternative sea routes practically mean circumventing the Arabian Peninsula, but they do not replace Hormuz for the countries located inside the Gulf, because their ships originally need to exit the Gulf through the strait.
What does this mean for Lebanon?
If the Strait of Hormuz is subjected to a prolonged closure or frequent disturbances, Lebanon may face an increase in the cost of shipping and maritime insurance, a delay in the arrival of goods, and an increase in the prices of imported goods, even if they are not coming directly from the Gulf, because the cost of global transportation is rising. Inflationary pressures on the economy as a result of increased import costs.
In conclusion, in the foreseeable future, the commercial importance of the Strait is likely to remain great for at least the next two decades, because creating land or sea alternatives requires huge investments, political agreements, and infrastructure that cannot be accomplished quickly. This leads to an important conclusion, which is that even if the Gulf countries succeed in reducing their dependence on Hormuz for oil exports, global trade will remain largely linked to the strait, because the movement of goods does not yet have an alternative equivalent to the efficiency of maritime transport through it. Therefore, any security tension in the Strait will quickly reflect on global shipping rates and supply chains, and not just on oil prices.
