Iraq and the UAE scramble for new oil routes as Hormuz exports falter—who wins the pipeline race?

Iraq and the UAE are moving quickly to build and expand alternative oil pipeline capacity as exports through the Strait of Hormuz “dry up,” according to reports dated June 9, 2026. In Iraq, the cabinet approved plans last week to accelerate crude exports via the Kurdistan–Turkey pipeline network, signaling an immediate push to reroute barrels away from the most sensitive maritime chokepoint. The UAE is simultaneously described as racing to establish alternative pipeline links, reflecting a broader Gulf effort to reduce dependence on Hormuz-linked shipping lanes. The combined message is that multiple exporters are preparing for a sustained disruption rather than a short-lived shock. Strategically, the race underscores how maritime geography is translating into pipeline leverage and regional bargaining power. If Hormuz throughput is constrained, Iraq’s ability to monetize crude depends on throughput agreements, tariff structures, and the political reliability of transit partners, especially Turkey-linked infrastructure. The UAE’s parallel push suggests it wants optionality—keeping export volumes flowing even if naval risk premiums rise or insurers tighten terms for Gulf shipping. Meanwhile, Iran’s role appears in the background through the broader regional energy and trade posture, while the Iraq–UAE competition for route resilience could intensify coordination or friction over transit capacity and scheduling. Market and economic implications are likely to show up first in crude logistics, regional refining margins, and shipping/insurance pricing, with knock-on effects for energy-linked currencies and risk premia. For crude, the direction is toward higher utilization of overland routes and potentially tighter near-term supply into markets that previously relied on Hormuz-bound flows; this can support differentials for pipeline-accessible grades while pressuring others. In parallel, the Pakistan–Iran border trade halt at the Gabd–Rimdan crossing is already raising fears of severe LPG shortages across Pakistan, with hundreds of tonnes of perishable exports at risk of spoilage in Gwadar. That LPG risk can translate into higher domestic LPG prices, increased subsidy pressure, and volatility in energy import expectations, particularly for retailers and distributors exposed to spot procurement. What to watch next is whether Iraq’s cabinet-approved acceleration turns into measurable throughput increases on the Kurdistan–Turkey network, including any bottlenecks in pumping capacity, metering, or transit approvals. Another trigger is whether the “Hormuz dry up” condition persists long enough to force longer-term contracting, insurance repricing, and inventory drawdowns in consuming markets. On the Pakistan side, the key indicator is whether customs and border controls at Gabd–Rimdan reopen quickly and whether LPG shipments resume before inventories run down. Escalation would be signaled by further border closures, additional pipeline announcements tied to emergency timelines, or rising energy price volatility; de-escalation would look like restored cross-border flows and stable pipeline nominations within days.

Geopolitical Implications

• 01

  Maritime chokepoint constraints are shifting leverage toward pipeline capacity and transit politics.

• 02

  Route diversification by Gulf exporters may intensify competition for nominations, tariffs, and scheduling across shared infrastructure.

• 03

  Border-control disruptions can rapidly destabilize energy and food logistics, increasing domestic political pressure.

Key Signals

• —Throughput and nomination data on the Kurdistan–Turkey pipeline network after the cabinet approval.
• —Clarification of the duration and cause behind the “Hormuz dry up” condition, including shipping/insurance policy changes.
• —Border reopening timeline at Gabd–Rimdan and confirmed LPG shipment arrivals into Pakistan.
• —Pakistan retail LPG price moves and inventory drawdown indicators.