Escaping the Hormuz Trap

For nearly three decades during those wars, Arab states seeking to pressure Israel and its Western backers repeatedly weaponized Middle Eastern oil transit chokepoints by blocking canals and sabotaging pipelines. Each time, Western oil companies, regional states, and European financiers engineered around the disruption by deploying larger tankers and building new pipelines.

The West and its allies can replicate that logic today by building new energy corridors to the Mediterranean to connect European demand to Gulf supply and deny Iran its chokepoint leverage. The first step should be restoring the Iraq-Turkey pipeline system and developing a Trans-Arabian energy route linking Gulf production to the Mediterranean coast.

The West’s strategy to counter oil supply disruption was first established during the 1956 Suez crisis, when Egyptian President Gamal Abdel Nasser blocked the Suez Canal—and Syria sabotaged Iraq Petroleum Co. pipelines—in response to a joint military attack by Israel, Britain, and France on Egypt. The United States, along with Western Hemisphere producers, particularly Venezuela, made up the shortfall by redirecting supplies to Europe, while Anglo-American oil companies began commissioning larger tankers, making the longer Cape of Good Hope route commercially viable for the first time.

U.S., British, and regional governments convened within months to discuss six competing pipeline proposals, including an ambitious scheme to carry Kuwaiti and Iranian oil through Iraq to a Turkish terminal. (The project anticipated, by two decades, the logic of the Kirkuk-Ceyhan pipeline, which became the primary northern export route for Iraqi crude, bypassing the Gulf entirely by carrying oil from the Kirkuk fields to the Turkish Mediterranean port of Ceyhan.) Meanwhile, Israel quietly laid an improvised 8-inch line from Eilat toward the Mediterranean, a stopgap that would later become the 42-inch Eilat-Ashkelon pipeline (EAP). The broader pipeline ambitions were shelved once Israeli forces withdrew from the Sinai Peninsula and the canal reopened in March 1957, but the engineering ingenuity and strategic rationale behind the plans endured.

Egypt’s shuttering of the canal again in June 1967 proved those instincts right. Following Israel’s surprise strikes on Egyptian airfields, Nasser scuttled 15 merchant vessels to seal the waterway for eight years, while Arab states imposed an oil embargo on Israel and its allies. But once again, non-Arab producers had ample spare oil production capacity to offset the loss, and the embargo was lifted that September.

The key to this swift resolution lay in advances in transit. Oil companies and producing states had begun adopting very large crude carriers—ships with a carrying capacity of roughly 2 million barrels—since 1956 but sharply accelerated the transition after 1967. Operating in international waters beyond the reach of regional actors, these vessels insulated shipments from nationalization, rendered the longer route around Africa commercially viable, and made Europe’s oil supply effectively unchokeable. Meanwhile, the canal became a frozen problem—a trophy Nasser was unwilling to surrender, even as its strategic value diminished. Oil prices remained stable from 1967 to 1973 due, in no small part, to Israel’s completion of the EAP in 1969. Then-Iranian Shah Mohammad Reza Pahlavi opted to supply the pipeline, remarking that as long as Israel remained in control of the pipeline, Iran would never have to worry about “Arabs ganging up” against it.

The 1973-74 Arab oil embargo following the Arab-Israeli war was a different matter. Unlike in 1967, there was little spare oil production capacity outside the Middle East. (U.S. domestic output had peaked in 1970 and was in decline, removing the buffer that had absorbed earlier disruptions.) Devastating effects—including the quadrupling of oil prices, driving bans in Europe, and emergency rationing in the United States—prompted an immediate structural response. The West began developing strategic reserves and turning to even larger ultra-large crude carriers, capable of carrying up to 3 million barrels. Even more consequentially, Mediterranean countries built new bypass pipelines: Iraq and Turkey completed the Kirkuk-Ceyhan in 1976 and Egypt the Suez-Mediterranean in 1977.

During the Iran-Iraq War, Iranian strikes on Iraqi export terminals and both sides’ attacks on Gulf tankers—the so-called 1984-88 Tanker War—made transit through Hormuz genuinely perilous for the first time. In response, Saudi Arabia completed the East-West pipeline to route crude to its Yanbu port on the Red Sea as direct self-insurance. Subsequently, the United Arab Emirates completed the ADNOC pipeline to Fujairah in 2012 following renewed concerns over Iranian threats.

The lesson for today is straightforward: Infrastructure is the most durable form of strategic deterrence. To strip Iran of its chokepoint leverage, Washington should lead a financing syndicate combining guarantees from the U.S. International Development Finance Corp. and the European Bank for Reconstruction and Development with Gulf sovereign wealth funds that would focus on two strategic hinges.

First, the Kirkuk-Ceyhan pipeline should be revamped to tie in the bulk of Iraq’s southern crude, and potentially oil from northeastern Syria, which will incentivize Baghdad to resolve its revenue-sharing disputes with Erbil. Second, a trans-Arabian energy corridor should be established to link Gulf oil and gas production directly to the Mediterranean—a reimagining of the Cold War-era Trans-Arabian pipeline, or Tapline, terminating at ports in Israel rather than Lebanon. Turkey has also proposed two longer-horizon gas ambitions: a trans-Caspian pipeline to bring Turkmen gas to Europe via Azerbaijan and a Qatar-Turkey gas corridor transiting Saudi Arabia, Jordan, and Syria.

The Kirkuk-Ceyhan revival would be the clearest possible near-term win, capable of restoring up to 1.6 million barrels per day through non-Hormuz routing and achievable within 12 to 18 months through targeted technical repair and diplomatic revenue-sharing agreements. The trans-Arabian corridor, operational within two to four years, could replicate or exceed Tapline’s capacity while adding a gas dimension that the pipeline never had.

Turkey’s plans for Turkmenistan and Qatar gas pipelines would require five to 10 years, but their combined potential rivals the volume currently transiting Hormuz as LNG and pipeline gas. Though no single corridor would close the 20 million barrels per day gap of crude, condensate, and gas left by a prolonged Hormuz disruption, together they could reduce that exposure enough to break the psychological and economic grip that Iran’s threat of closure currently commands.

The political obstacles are admittedly steep. Fractured revenue-sharing between Baghdad and Erbil, the normalization required for Israeli-Arab pipeline coordination, and the ever-present risk of Syrian instability all present real challenges. The historical analogies are imperfect too: The volume of oil transiting Hormuz today dwarfs anything the Cold War disruptions involved, and modern drone warfare means overland corridors are not immune to attack, particularly where Iranian proxies operate in Iraq and Syria.

Yet infrastructure can create durability that coercion cannot easily undo. Unlike maritime routes exposed to mines or missiles, damaged overland pipelines can typically be repaired within days or weeks. Sustained attacks on pipelines transiting Turkey or Israel would also risk large-scale escalation—a deterrent for Iran in and of itself. History further demonstrates that states remain incentivized to maintain these systems even through political hostility: The Kirkuk-Ceyhan pipeline survived the Gulf War, the Iraq War, and Kurdish insurgencies precisely because Baghdad, Ankara, and major oil companies depended on it.

The lesson of the past 70 years is that transit crises are solved by engineers and financiers long before they are solved by militaries or diplomats. The rise of the supertanker and Mediterranean bypass pipelines made the Suez Canal’s reopening an Egyptian economic necessity. Washington and its allies should treat bypass financing as the ultimate geoeconomic deterrent—a signal to Tehran that its ability to hold the global economy hostage can be structurally undermined.