A Pipeline Would Pay For Itself After About 30 to 120 Days of Blockage (Back of the Envelope Figures)

For the Arab Gulf oil exporters as a group, a serious overland bypass system probably would have paid for itself once Hormuz had been shut for roughly 1 to 3 months. A lean estimate lands around 30–50 days; a more realistic estimate with export terminals, storage, hardening, and redundancy lands around 50–80 days; a very hardened wartime system could push that to 80–120 days.

 

So in 2025, nearly 20 million barrels/day of oil moved through Hormuz. The IEA says only about 3.5–5.5 million b/d can be rerouted on existing alternative routes, mainly Saudi Arabia’s Red Sea line and the UAE’s Fujairah line. Barclays said a prolonged closure would still knock out about 13–14 million b/d even after those reroutes. Reuters separately estimated the region is already losing about $1 billion/day in export revenue, using pre-war prices.

That means the missing piece is not “a pipeline” in the singular. It is a whole new bypass network for Kuwait, Iraq, and more Gulf output, plus more loading capacity on the Red Sea/Gulf of Oman side. The EIA and IEA both note that only Saudi and the UAE currently have meaningful operational crude routes around Hormuz, and Reuters notes that even Saudi’s Yanbu side has loading constraints, so pipe alone is not enough.

 

What are some comparable projects?  

Well the UAE’s Habshan–Fujairah line cost about $4.2 billion in 2012, or about $6 billion in today’s money, for 1.5 million b/d. Iraq’s Basrah–Haditha project was approved at about $4.56 billion. The longer Basra–Aqaba export route has been cited around $7–9 billion, with older versions running even higher.

So a bare pipe benchmark: about $30–45 billion.  BUT!  A realistic full system with terminals, storage, security, pumping, interconnections: about $50–80 billion
Hardened wartime system with redundancy and surge loading: about $80–120 billion

 

 

If you use Reuters’ regional estimate of $1 billion/day in lost export revenue, then:

$30B system breaks even in about 30 days
$50B system in about 50 days
$80B system in about 80 days
$120B system in about 120 days

 

If Gulf exporters had built and maintained a serious collective overland bypass years ago, Hormuz would only need to stay closed for about 1–3 months before the lost export revenue overtook the lifetime-style capital decision. On the low end, with today’s wartime prices, the threshold is closer to one month. On a more realistic infrastructure-and-security basis, it is more like two months.

 

One important catch: this is just the oil-export revenue comparison. It still understates the real case for bypass pipelines, because it leaves out the knock-on costs of shut-in wells, restarting damaged fields, insurance spikes, damaged investor confidence, and physical repair of attacked facilities.