Hormuz ‘Can’t Return to Normal’ as 45% of Gulf Oil May Bypass Strait by End-2027

US, Iran Clash Again 20 Days After Signing Ceasefire Memorandum

Hormuz Reclosed as Oil Surges More Than 10%

US Think Tank Sees Zero Chance of Strait Returning to Normal

Gulf States Seek New Ports, Pipelines

DP World Unveils Development Plan

UAE Eyes Port on East Coast Facing Gulf of Oman

The Strait of Hormuz has been closed again after the US and Iran resumed fighting just 20 days after signing a memorandum of understanding to end the war. Concern is growing among experts that the waterway may never return to its prewar state. One global port operator has begun developing a new shipping route using the Gulf of Oman. Goldman Sachs projects that more than 45% of Gulf oil exports will bypass the Strait of Hormuz by the end of 2027 as producers accelerate new and expanded pipeline projects.

On July 13, President Donald Trump wrote on social media that the Strait of Hormuz would remain open, but vessels would be charged a fee equal to 20% of cargo volumes in exchange for security. He added that a blockade against Iran would resume. On July 12, Iran’s Islamic Revolutionary Guard Corps formally announced the strait’s closure.

The renewed closure of one of the world’s most important energy chokepoints sent crude prices sharply higher. Front-month West Texas Intermediate, which had fallen below $70 a barrel on July 6, climbed to $78.14 on July 13. Brent rose 15.7% over the same period, based on closing prices, from $71.99 to $83.30 a barrel.

As uncertainty around the Strait of Hormuz deepens, calls are mounting for alternative shipping routes. Rachel Ziemba, a senior fellow at the Center for a New American Security, told The Wall Street Journal that the chance of the strait returning to its previous normal state was effectively zero. The outlook strengthens the case for investing in other routes as quickly as possible.

On Wall Street, traders have even coined the term “NACHO,” short for “No Chance Hormuz Opens.” The phrase reflects a view that the maritime route, which had carried about 20% of global crude, could remain effectively closed. That would increase the economic costs of higher oil prices and faster inflation.

Saudi Arabia, Iraq and the United Arab Emirates are planning new ports and pipelines that would bypass the Strait of Hormuz. Goldman Sachs said in a recent report that more than 45% of Gulf crude could avoid the waterway by the end of 2027 if new and expanded pipelines are completed. That share would rise above 60% by the end of 2028.

The bank based its forecast on seven pipelines that are already under construction or in the planning or review stage. In that scenario, effective pipeline transport capacity would increase by an additional 3.8 million barrels a day by the end of 2027. The total increase would reach 7.3 million barrels a day by the end of 2028. Goldman based the estimate on a construction period of two and a half years. If building speeds up, as much as 75% of exports could bypass Hormuz by the end of 2028.

Alexandra Paulus, the analyst who wrote the report, said the recent rise in oil prices shows how important flows through the Strait of Hormuz remain to energy prices in the short term. Expanded transport infrastructure across the Middle East would meaningfully reduce that vulnerability.

Efforts are also underway to establish new maritime routes. DP World plans to build a new port and container terminal on the UAE’s eastern coast. The Financial Times reported that ships would dock in the Gulf of Oman instead of passing through the strait. Cargo for inland areas including Dubai and Abu Dhabi would then be moved by truck.

Jebel Ali, inside the Persian Gulf, is the UAE’s largest container port. But traffic there has fallen 90% to 95% after the war in the Middle East closed the strait. That prompted DP World to pursue an alternative port. A senior company official cited by the FT said the new facility could be completed in as little as a year and a half.

Son Ju-hyung, Hankyung.com reporter handbro@hankyung.com