politics

Gulf states eye alternatives to Strait of Hormuz

The disruption to shipping through the Strait of Hormuz is exposing a structural constraint in global energy markets: alternatives exist, but were they ever designed to fully replace the corridor?

The strait is not just another transit route. It is the only maritime exit from the Arabian Gulf to open seas. The United Nations Conference on Trade and Development estimates that roughly 20%–25% of global seaborne oil and about 20% of liquefied natural gas pass through it each day. That concentration of flows explains why disruptions quickly translate into global price volatility.

The International Energy Agency has described the current outage as the largest oil supply disruption in history. Its Executive Director Fatih Birol said recently that it amounts to the “biggest energy crisis in history,” according to Reuters. Crude prices also surged as markets began pricing in prolonged supply disruption from the Gulf.

The 1,200-km pipeline links the kingdom’s eastern oilfields to the Red Sea port of Yanbu. It can carry up to 7 million barrels per day (bpd), although effective export capacity is closer to 4.5 million bpd due to terminal constraints, according to Reuters.

This route shifts exports away from the Gulf entirely. Tankers from Yanbu can move toward Europe via the Suez Canal or toward Asian markets via the Bab el-Mandeb. That creates a second chokepoint. Security risks in the Red Sea corridor, including tanker attacks linked to regional conflicts, mean the diversion reduces exposure to Hormuz but does not eliminate it.

Bloomberg reported that Saudi Arabia has increased utilisation of the pipeline since the disruption began, highlighting its role as the primary shock absorber in the system.

UAE pipeline offers geographic advantage

The UAE bypasses the chokepoint geographically rather than reroute across the peninsula. The Habshan–Fujairah pipeline, operated by ADNOC, carries crude from inland fields to Fujairah on the Gulf of Oman. With capacity of about 1.5–1.8 million bpd, it allows exports to avoid Hormuz entirely, Reuters reported.

Fujairah has evolved into a major global storage and bunkering hub, reinforcing its role in supply continuity. But capacity remains limited relative to Gulf export volumes, and infrastructure at the port has recently been affected by drone attacks since the conflict escalated, according to Reuters.

The UAE model shows how geography can reduce reliance on chokepoints, but not remove systemic vulnerability.

Iraq: Diversification via multiple smaller routes

Iraq’s export structure reflects a different constraint — limited pipeline redundancy. The Kirkuk–Ceyhan pipeline to Turkey provides a northern outlet to the Mediterranean. Current flows stand at about 170,000 bpd, with plans to increase to 250,000 bpd. Even at full utilisation, that represents a small fraction of Iraq’s export capacity.

Faced with disruptions in Gulf shipping, Iraq has also turned to overland exports via Syria, according to Reuters. That shift increases transport costs and operational complexity, underlining how alternatives often come with economic trade-offs.

Rather than a single large bypass, Iraq relies on multiple smaller routes, none of which materially change its exposure to Hormuz.

Iran: Partial bypass without full functionality

Iran has attempted to build its own workaround through the Goreh–Jask pipeline, designed to carry around 1 million bpd to terminals on the Gulf of Oman.

The IEA said the Jask terminal is not fully complete, and according to Reuters, this limits its ability to offset disruptions despite a test shipment in 2024.

That leaves Iran in a transitional position — with infrastructure in place, but not yet capable of fully offsetting disruptions.

Alternatives constrained by cost, politics, time

Several proposed routes aim to reduce long-term dependence on Hormuz, but none address immediate supply risks.

Iraq has revived plans for a pipeline from Basra to Oman’s port of Duqm, which would provide direct access to the Indian Ocean. Reuters reported that the project remains at an early conceptual stage, with route options still under study.

A separate Iraq–Jordan pipeline to Aqaba has been under discussion for decades. Despite in-principle approval, it remains stalled due to financing, security concerns and political coordination challenges.

More ambitious proposals, including a canal linking the Gulf to the Arabian Sea, remain theoretical. Engineering constraints — including mountainous terrain — and costs running into hundreds of billions of dollars make such projects long-term possibilities at best.

Constraint is structural, not temporary

The core issue is not the absence of alternatives, but their scale. Around 20 million bpd of crude and refined products typically flows through Hormuz, far exceeding the combined capacity of existing bypass pipelines, according to data from the IEA.

The agency has also said there are no alternative routes for large volumes of LNG that transit the strait. This imbalance explains the market reaction. Bloomberg reported that oil price volatility has increased as traders factor in sustained supply tightness and elevated geopolitical risk.

Why Hormuz remains indispensable

The region’s infrastructure allows for partial rerouting. It does not provide redundancy at system level.

Saudi Arabia can divert significant volumes. The UAE can bypass the strait for part of its exports. Iraq and Iran can shift limited flows through secondary routes. None of these options replace the throughput of Hormuz.

That leaves global energy markets exposed to a single chokepoint. As Reuters’ route-by-route assessment and IEA data indicate, any prolonged disruption is likely to tighten supply, increase transport risk and sustain price pressure well beyond the region.

politics

Trump extends Iran ceasefire

Donald Trump has extended the ceasefire with Iran, averting a return to fighting just hours before it was due to expire. Pakistan’s Prime Minister Shehbaz Sharif has thanked Trump for extending the truce. Trump said the US will maintain its blockade of the Strait of Hormuz and Iranian ports until Tehran submits a ‘unified proposal’ and talks are completed. Iran has yet to respond to Trump’s ceasefire extension. Follow our live blog for the latest updates.

10:13 AM, 22 April 2026

Iran hangs man convicted of links to Israel’s Mossad

Iran hanged a man on Wednesday convicted of links to Israel’s Mossad spy agency, the judiciary said, the latest in a string of executions against the backdrop of the war with Israel and the United States.

“Mehdi Farid… was hanged this morning for extensive cooperation with the terrorist spy service Mossad after the case was examined and the final verdict was approved,” the judiciary’s Mizan Online website said.

It was not immediately clear when he was arrested or when his trial took place, but the court found him guilty of “intelligence cooperation and espionage for the Zionist regime” under the capital offence “corruption on earth”.

09:55 AM, 22 April 2026

Israeli strike on Lebanon’s Bekaa kills one despite truce

An Israeli strike on Lebanon’s Bekaa region killed one person and wounded two others on Wednesday, Lebanese state media reported, despite an ongoing truce between Israel and Iran-backed Hezbollah.

“One person was killed and two others were wounded as a result of an attack carried out by an enemy drone at dawn on the outskirts of Al-Jabur in West Bekaa,” Lebanon’s state-run National News Agency (NNA) reported.

Hezbollah on Tuesday said it had launched rockets and attack drones at a site in northern Israel in response to “blatant” Israeli ceasefire violations, which it said included “attacks on civilians and the destruction of their homes and villages”.

The Israeli military said that day that Hezbollah “launched several rockets” towards soldiers stationed in south Lebanon and that the military struck the launcher in response.

NNA on Wednesday reported Israeli artillery shelling and demolitions in southern towns Israel currently occupies.

09:50 AM, 22 April 2026

Iranian gunboat targets container ship off Oman coast

An Iranian gunboat fired at a container ship off the coast of Oman on Wednesday, causing damage but no casualties, the UKMTO British maritime security agency said.

“The master of a container ship reported that the vessel was approached by one IRGC gunboat… that then fired upon the vessel, which has caused heavy damage to the bridge. No fires or environmental impact reported,” the UKMTO said.

It added that the incident took place 15 nautical miles northeast of Oman and all the crew were safe.

09:05 AM, 22 April 2026

US Treasury vows maximum pressure as Iran blockade continues

US Treasury Secretary Scott Bessent, in a post on X, said the United States Navy will continue its blockade of Iranian ports. He warned that Kharg Island oil storage is nearing capacity and that Iran’s fragile oil wells may be shut in, directly targeting the regime’s primary revenue sources.

Bessent added that the Treasury will maintain ‘maximum pressure through Economic Fury’ to disrupt Tehran’s ability to generate, move, and repatriate funds. He also cautioned that anyone facilitating covert trade or finance with Iran risks US sanctions.

He said the Treasury is freezing funds stolen by corrupt leadership on behalf of the people of Iran.

08:43 AM, 22 April 2026

Iran undecided on next US talks amid extended ceasefire

Donald Trump has extended the ceasefire with Iran, but Tehran has not yet confirmed whether it will attend a new round of peace talks with the U.S. later this week.

In an interview with the BBC, Iranian Foreign Ministry spokesman Esmail Baghaei said Iran approached the first round of Islamabad talks ‘with good faith and a sense of seriousness, but you have a negotiating party that has shown its lack of seriousness, lack of good faith.’

08:31 AM, 22 April 2026

Trump says Iran losing $500m a day, calls situation ‘SOS’

Donald Trump has claimed that Iran is ‘collapsing financially’ in a post on Truth Social, saying the country is ‘starving for cash’ and losing around $500 million a day.

Trump alleged that Iran’s military and police are complaining about unpaid wages and said Tehran wants the Strait of Hormuz reopened ‘immediately’.

He added that the situation amounts to an ‘SOS’, amid ongoing tensions over the US blockade of Iranian maritime routes.

Analytics

How Much People Save Around the World

This chart ranks household savings rates across major economies using the latest OECD data. It reveals a wide gap between top savers and those struggling to set money aside. In countries like Sweden and Hungary, households save more than 10% of their income. In the U.S., that figure is just 4.9%.

In some cases, the gap is even more striking. Americans save roughly half as much as households in Mexico, highlighting how cost pressures and consumption patterns differ across economies.

How Much People Save by Country

Sweden ranks as the most disciplined saver, with net household savings rates rising nearly eightfold from 2.3% to 16% over the past two decades.

Many European countries also rank at the top of the list. Households continue to set aside a relatively large share of their income, including Hungary (14.3%) and France (12.8%). These elevated rates are often linked to structural factors such as pension systems and aging

he table below shows savings rates by country in 2024, or the latest available data:

Country	Net Saving Rate (% of net disposable income)
🇸🇪 Sweden	16.0%
🇭🇺 Hungary	14.3%
🇨🇿 Czechia	13.7%
🇫🇷 France	12.8%
🇦🇹 Austria	11.7%
🇩🇪 Germany	11.2%
🇳🇱 Netherlands	9.5%
🇪🇸 Spain	9.2%
🇮🇪 Ireland	9.0%
🇩🇰 Denmark	8.5%
🇲🇽 Mexico	8.1%
🇧🇪 Belgium	6.6%
🇵🇱 Poland	6.1%
🇦🇺 Australia	6.1%
🇱🇺 Luxembourg	5.0%
🇨🇦 Canada	5.0%
🇺🇸 United States	4.9%
🇰🇷 South Korea	4.8%
🇬🇧 United Kingdom	4.7%
🇵🇹 Portugal	4.5%
🇫🇮 Finland	4.3%
🇮🇹 Italy	4.2%
🇳🇴 Norway	4.2%
🇱🇹 Lithuania	3.8%
🇪🇪 Estonia	3.0%
🇯🇵 Japan	0.9%
🇱🇻 Latvia	0.0%
🇿🇦 South Africa	-1.0%
🇳🇿 New Zealand	-1.3%

In the middle of the pack, savings rates drop off quickly. The U.S., Canada, and the UK all cluster around 5% or lower, far behind top European savers. The gap is particularly striking when compared globally. U.S. households save about half as much as those in Mexico, and less than one-third of what households in Sweden set aside each year.

At the bottom of the ranking, the picture flips entirely. In countries like New Zealand and South Africa, households are not saving at all. Instead, they are spending more than they earn.

Negative savings rates typically mean people are dipping into past savings or taking on debt to cover everyday expenses, a sign of financial strain rather than choice.

What It Means Going Forward

Savings rates are a key signal of financial resilience.

Countries where households consistently save more tend to have a stronger buffer against inflation, job losses, or economic shocks. Higher savings can also support long-term investment and stability.

On the other hand, persistently low or negative savings rates can point to underlying pressure. When households have little margin to save, economies may become more vulnerable to downturns, rising debt levels, and weaker consumer spending over time.

Visual Capitalist

politics

Truce in Balance After US Seizes Iranian Ship

Concerns grew on Monday that the ceasefire between Washington and Tehran could collapse, after the United States announced it had seized an Iranian cargo ship that tried to breach the blockade imposed on the Islamic Republic’s ports, prompting the Islamic Republic to vow to retaliate.

Efforts to achieve a more lasting peace in the region also appeared to be on shaky ground, as Iran announced it would not participate in a second round of negotiations that the United States had hoped would begin before the ceasefire ended on Tuesday. Iranian state media reported that Tehran had refused to hold new peace talks, citing the ongoing blockade, the threatening tone, Washington’s volatile positions, and its “excessive demands.”

The US military said Sunday it fired on an Iranian-flagged cargo ship as it sailed toward the port of Bandar Abbas. US President Donald Trump wrote on social media, “We now have total control of their ship, and are checking what’s on board!”

The Iranian military stated that the ship was coming from China. State media quoted a military spokesperson as saying, “We warn that the armed forces of the Islamic Republic of Iran will soon respond and avenge this act of armed piracy committed by the US military.”

Al sharq Al Awsat