The bilateral deals Iraq and Pakistan quietly struck with Iran to secure oil and LNG passage through the Strait of Hormuz this week look like pragmatic crisis management. But they could signal something much more troubling for the Gulf: Tehran cementing permanent control over a globally crucial energy corridor.
The Gulf states have most to lose if Iranian control holds.
The war has shattered the key assumption underpinning Gulf energy exports: free navigation through Hormuz. The conflict triggered a cascade of force majeure declarations — from QatarEnergy to Kuwait's KPC and Bahrain's Bapco — as the closure of the strait stranded Gulf energy exports. The bilateral deals now emerging are a response to that emergency. As Claudio Steuer of the Oxford Institute for Energy Studies put it: "Iran has shifted from blocking Hormuz to controlling access to it ... Hormuz is no longer a neutral transit route, it is a controlled corridor.”
The danger for Gulf producers is that each deal could normalise Iranian control of that corridor. Only Saudi Arabia and the UAE have operational crude pipelines that can reroute flows to bypass the strait. Iraq, Kuwait, Qatar and Bahrain rely on it to deliver virtually all of their energy exports. Iran's selective transit system thus hits the region's most exposed producers hardest. Qatar's Ras Laffan, for example, is the world's largest LNG export terminal at a single location — handling around 77 million tonnes annually, roughly a fifth of global LNG trade — and there is no alternative to shipping that gas through Hormuz.
Even those with pipeline options face limits. Saudi Arabia's East-West pipeline was attacked by Iran in April. The port of Fujairah, the UAE’s key port on the Gulf of Oman, has been attacked by Iranian drones, disrupting oil loading operations. Rerouting away from Hormuz relocates risk rather than eliminating it, and the threat to Red Sea shipping adds a further layer of persistent maritime insecurity on Saudi Arabia's westward route.
Shipping traffic through the Strait of Hormuz has largely been blocked by Iran since February 28, and the idea of Iran shutting or selectively controlling Hormuz had, until then, been largely theoretical — the strait had never been fully closed, and most assumed it never would be. Whether Iran can sustain control remains uncertain — but the emerging pattern suggests something more consequential than closure: a strait whose access Tehran now appears able to selectively restrict.
Gulf states are seriously considering bypass projects. Saudi Arabian Railways announced five new freight logistics corridors in April. Turkish Energy Minister Alparslan Bayraktar has proposed reviving a long-stalled Qatar-Turkey gas pipeline – a massive undertaking. But infrastructure takes years; Iran's leverage is already in place.
A half-open Hormuz — selectively managed by Tehran — would institutionalise disruption rather than resolve it, leaving Gulf exporters perpetually dependent on a neighbour that has already shown it will weaponise geography. No bypass appears likely to significantly change that calculus. Only a political settlement can.
