Beyond the Strait: Gulf looks for an escape route from Hormuz

The Middle East conflict has put the world’s energy lifeline, the Strait of Hormuz, in a chokehold.But the Gulf might be looking for an escape route.Over the next five years, countries in the region could invest in alternative logistics corridors and energy pipelines to loosen their dependence on the strategic waterway and keep oil and gas flowing, HSBC group chief executive Georges Elhedery said on Tuesday.The conflict has exposed the risks of depending on the strategic waterway, which previously carried a fifth of global oil and liquefied natural gas trade.

Gulf nations are now being pushed to direct resources towards developing energy pipelines connecting production centres to ports, potentially allowing shipments to bypass the strait.Speaking at the HSBC Future Forum in Dubai, Elhedery said the region would be able to recover from the conflict and continue growing, but that doing so would require substantial investment."We do see this region being able to recover and then continue growing.

It will mean a lot of investment," the bank CEO said."Of course, we do wish and hope to see a resolution to the conflict... But Hormuz, probably in five years' time, may become redundant," he added.$1.4 trillion infrastructure pipelineThe shift towards alternative routes comes as the Middle East, North Africa and Turkey have a substantial pipeline of infrastructure projects that could attract investment.According to an HSBC report published on Monday, citing data from Dubai-based construction industry market intelligence platform MEED, the regions are offering $872 billion in individual project packages.

These form part of a wider $1.4 trillion pipeline of infrastructure projects that have been planned but not yet awarded.The investment pipeline comes as Gulf countries consider ways to limit the disruption caused by the conflict and strengthen their ability to move energy supplies through routes other than the Strait of Hormuz.Gulf remains attractive to investors despite warDespite the conflict, business leaders and institutional investors continue to view the Gulf as an attractive destination for investment.A recent HSBC survey of more than 1,600 business leaders and around 820 global institutional investors found that respondents still considered the region an appealing investment hub.However, the economic outlook for the wider region has weakened.

After recording growth of 3.3% in 2025, the Middle East, North Africa and Pakistan region is expected to contract by 1.3% this year because of the war, according to a World Bank forecast issued last week.The contraction is expected to be followed by a strong but uneven recovery in 2027.Elhedery was among the global financiers expected to attend Saudi Arabia's flagship investment conference next week.

The event was postponed until 2027 on Monday following deadly strikes in Riyadh by Yemen's Iran-backed Houthis.You use AI every day. Now get your AI Quotient. Take the AIQ test.