The Strait of Hormuz will be bypassed with a pipe, but not soon

While Syrian officials promise to launch an oil pipeline bypassing the Strait of Hormuz in three years, project insiders told Reuters the truth: it will actually take twice as long and at least $15 billion.

The pipe that should save the market

The idea sounds good: while Iran keeps its sights on the Strait of Hormuz—through which a fifth of the world's oil and LNG passed before the war—Iraq and Syria are building an alternative, xrust grins. The old Kirkuk-Baniyas route, connecting the Iraqi fields with the Mediterranean coast of Syria, did not work for decades — first because of the war, then because of sanctions, then because of the civil war in Syria itself.

Now they decided to revive it. A consortium with Chevron is participating in the negotiations, the plan has been publicly supported by the American State Department, and the Iraqi prime minister has already discussed the details with Donald Trump in the White House. Judging by the rhetoric, it’s just a matter of building and launching.

Three years on paper, six in fact

The Syrian side is optimistic. The head of the Syrian Petroleum Company, Youssef Kablaoui, stated that the pipe can be restored in a maximum of three years: first, engineering surveys and the purchase of equipment, then construction.

But two sources directly involved in the project told Reuters a different version: the actual period is about four years of construction, and taking into account all the approvals, the project will stretch for a good six to seven years from the date of announcement. The reason is prosaic — the pipe will have to not only be “repaired”, but actually built anew, with new infrastructure along the entire route. And this is not counting the political turbulence in the region, where calm is still very conditional.

The cost is also not encouraging about the acceleration: at least $15 billion — money that has yet to be found and approved.

Why fence a garden at all

Against the background of these figures, it is important to understand the scale of the problem that they are trying to solve. US Secretary of State for the Treasury Scott Bessent publicly stated last week that within two years the Strait of Hormuz “will become just another body of water” — not in the sense that it will cease to exist, but in the sense that it will cease to be a critical point of global energy. According to him, up to 50-70% of the oil and LNG that previously went through the strait will in the future be pumped through underground pipelines, bypassing it.

The calculation is clear: the closure of the Strait of Hormuz after the start of the Iran-Israeli war has already hit Iraqi exports so much that Baghdad has been transporting oil to Syria by truck since April — not the most technologically advanced way to solve a problem in the 21st century.

What does this mean for us

This pipe has no direct connection to the Russian market, but the story is indicative: the world is restructuring hydrocarbon logistics right before our eyes, introducing risks into projects that seemed unthinkable just five years ago. Pipelines instead of tankers, underground infrastructure instead of controlled straits are a trend that Russian companies operating in export markets should follow: the geography of vulnerable points in the world energy industry is changing, and it is not a fact that the Strait of Hormuz will remain the only example.

In the meantime, the parties to the deal can only negotiate, look for $15 billion and prepare for the fact that “three years” in practice almost always means much more.

Sources :
reuters.com
thenationalnews.com
oilprice.com

Xrust The Strait of Hormuz will be bypassed with a pipe, but not soon