Milan (AsiaNews) – As war escalates in the Middle East, with fighting resuming in Yemen, the energy landscape is changing, with the choking off of both the Strait of Bab el-Mandeb and the Strait of Hormuz, crucial routes for shipping crude oil and gas.
Saudi Arabia is warning that oil exports could be turned off unless the main East-West pipeline is back up operating within days after Houthis recently launched a drone and missile against it, resulting in a 4 per cent drop in global supply.
This could further aggravate shortages, which have already driven fuel and natural gas prices to record highs with Brent crude up 3 per cent in Asian trading yesterday, breaching the US$ 100 mark, eventually settling at US$ 107 per barrel.
One fifth of global oil trade and one quarter of liquefied natural gas (LNG) shipments used to pass through Hormuz; until now, the only real alternative was the Bab el-Mandeb Strait, the southern gateway to the Red Sea.
Faced with a potentially worsening situation, governments and industry players are seeking alternative routes, starting with Iraq, which is trying to boost exports via Syria and Turkey.
“Houthi intervention could exacerbate an already highly delicate energy situation,” said Amer Al Sabaileh, an academic and geopolitical analyst specialising in Middle Eastern affairs, international security, and peace process policy in crisis zones, who contributes to various publications, including The Jordan Times.
“We cannot,” he told AsiaNews, “view events in the Red Sea as a something separate from Iran’s strategy. Tehran has realised that if it cannot completely halt operations in the Strait of Hormuz, it can try to target alternative routes that allow Gulf nations to mitigate the impact of a blockade of the Strait.” This is based on the “ability to exert pressure on the energy sector and, through energy, on the economy and politics.”
In the scholar’s view, the international community bears clear responsibility for failing to propose a “decisive” response under UN auspices to guarantee freedom of navigation.
“The Houthis’ reaction,” he stressed, “can also be interpreted as an attempt to widen the scope of the conflict,” given that they “occupy a geographically advantageous position for threatening shipping,” even without possessing the military capabilities of a state.
“It is enough to make a route riskier, costlier, and less predictable”. Although this is not “a situation destined to last forever,” it could still have significant effects, “especially in the short term.”
Alternative routes
Hormuz is one of the world’s primary export routes for oil and liquefied gas; prior to US and Israeli attacks on Iran, the strait handled nearly 20 million barrels per day of exports from Gulf states. Now, daily flows are estimated at between six and eight million.
The situation regarding gas is even more critical. Qatar, the region’s largest producer, is struggling to export even a portion of its output due to damage sustained by its Ras Laffan hub during Iranian raids.
The risk profile associated with Hormuz and Bab el-Mandeb not only places pressure on two vital energy chokepoints for global supplies but also creates a double bottleneck for world trade.
This has led to the search for overland corridors and secure ports, with countries striving to diversify sources and establish new transit routes.
Two overland routes represent viable alternatives: the Trans-Anatolian Natural Gas Pipeline (TANAP), running from the Shah Deniz 2 field in the Caspian Sea, Azerbaijan, to Turkey’s western border, and the Baku-Tbilisi-Ceyhan (BTC) oil pipeline.
Other transport routes, such as the Kirkuk-Ceyhan line (Iraq-Turkey) and the high-capacity storage and loading terminals at Ceyhan, stand out as crucial for stability during this period of profound uncertainty.
Recently, Iraqi Oil Minister Bassem Mohammed Khudair announced plans to increase oil exports via Syria and the Turkish port of Ceyhan.
Baghdad, the minister noted, plans to increase export capacity via pipelines via Syria and the port of Ceyhan in Turkey to over one million barrels, bringing total capacity to five million barrels per day.
To this end, it is necessary to complete strategic infrastructure extending towards Faysh Khabur and Baniyas, as well as Hormuz.
On 18 July, Syria signed two memoranda of understanding with Iraq and a consortium of global companies to revive the Kirkuk-Baniyas route.
Energy security
Current events are prompting countries in the region “to rethink energy security”, said Al Sabaileh. “It is no longer just a matter of finding a single alternative to Hormuz, but of building a network of alternative routes.”
This means “oil and gas pipelines to the Mediterranean, overland links, the use of the Gulf of Aqaba and the port of Aqaba [in Jordan], the possibility of reaching the Mediterranean via various corridors, and, looking ahead, even connections to Israeli ports.
“These,” he added, “are the ‘thousand channels’ that can help reduce vulnerability to the disruption of a major route,” while also taking into account the “geopolitical dimension.”
For its part, “Iran has an interest in maintaining pressure on the international energy market; consequently, any new route that limits the impact of Hormuz could become a target of direct or indirect pressure.”
In addition, Tehran has used “regional actors” to influence its neighbours in the past, and today “similar dynamics” are visible in Yemen with the Houthis. “The new development is that Gulf countries are no longer seeking a temporary solution,” but are aiming for “genuine diversification of energy infrastructure.”
“Some pipeline and overland link projects could reduce dependence on both Hormuz and, in certain cases, Bab el-Mandeb, but they will not be enough."
Key players “are trying to figure out how to reduce their exposure to major maritime routes, which explains the focus on Syria, Jordan, and Aqaba, as well as potential links to the Eastern Mediterranean.”
The Iraq-Syria axis "could take on some importance" during an "emergency," but "I would be very cautious about viewing overland transport, particularly by road, as a long-term strategic solution." There are "too many obstacles" for it to be effective, including “infrastructure, capacity, costs, security, political instability, and, above all, the need to cross highly vulnerable territories.”
At this stage though, "every possibility" is being evaluated. This is the “most interesting” aspect, as "the crisis is forcing a shift away from individual thinking toward a regional energy network perspective.” This "evolution” could have "political consequences," fostering "a more coordinated position vis-à-vis Iranian pressure."
Turkey-Israel trade
Another factor concerns illegal trade between ostensibly rivals, a matter brought to light by a joint investigation by Oil Change International (OCI) and the Centre for Research on Multinational Corporations (SOMO), which revealed the presence of intermediaries operating between Turkey and Israel.
From the Gulf to the Palestinian issue and Gaza, many issues have pitted Israeli Prime Minister Binyamin Netanyahu against Turkish President Recep Tayyip Erdoğan in a fierce, albeit, thus far, purely verbal, clash.
Yet, behind the scenes, oil shipments have continued uninterrupted even following the embargo of 2 May 2024, as evidenced by the transport of more than 14 million barrels by two companies, one of which, Heritage, owns two Turkish subsidiaries.
The Turkish port of Ceyhan was identified as the point of transhipment used to move the crude oil. Turkey is mentioned 37 times and reportedly played a “major role" in transporting fuel for the Israeli military, effectively serving as a lifeline.
“It is hard to imagine,” states Amer Al Sabaileh, “a genuine strategic coexistence between the current Turkish government and Israel because their differences are not merely situational; however, this does not mean that economic and energy interests automatically cease.
“Trade often manages to survive even when political relations are extremely strained, yet I do not believe energy needs are sufficient to transform this reality into true political reconciliation.”
At the same time, “After nearly three years of conflict, we must look at how much has changed regarding Iran’s capacity to project its influence across the region.”
Tehran built “a network to leverage [its influence], spanning Lebanon, Gaza, the West Bank, Syria, Iraq, and Yemen. Today, many of these tools have been weakened, but they have not disappeared;” instead, “the ability to utilise them has shifted.”
“The next phase could be marked by heightened pressure within Iran itself,” he noted, “but that does not mean the risk of escalation has diminished. On the contrary, precisely because Iran has lost some of its strategic depth, it might seek new forms of leverage through energy, infrastructure, and trade routes; the real contest may not be merely military”.
Ultimately, this will hinge on the “ability of countries in the region (Gulf states, Iraq, Jordan, Israel, Turkey) to make themselves less vulnerable to Iranian pressure. If they succeed in building a diversified network of energy and trade infrastructure, the strategic impact will be profound,” Sabaileh explained.
If this happens, “Iran will lose the ability to turn a single route, such as the Strait of Hormuz, into a lever capable of influencing the entire international market. And this could be one of the most significant geopolitical outcomes: a new map of energy routes and a new regional security architecture.”
