New Delhi/London; August 2026: UK shipbroker Alibra Shipping has warned of big logistical anomality facing plans for a deepwater oil pipeline linking the Persian Gulf to India, bypassing the Strait of Hormuz. The proposal could be a game-changer for the strait. The shipping chokepoint handles around 20% of global oil and liquefied natural gas exports but has, in effect, been closed because of the US-Iran war, having a critical impact on global energy markets.
UK engineering group Peritus International had earlier stated in May this year (2026) that it had been awarded a feasibility study by South Asia Gas Enterprises (SAGE) in India to investigate the potential for a pipeline line running from the United Arab Emirates under the Arabian Sea. The company said:
“The award comes at a moment of heightened urgency for Gulf energy infrastructure, as disruption to the Strait of Hormuz continues to expose the vulnerability of seaborne energy supply routes across the region. India is the world’s third-largest crude oil importer, and while Russian purchases have grown significantly in recent years, around 40% of India’s crude imports still transit the Strait of Hormuz. The disruption has triggered immediate concern over supply continuity and price stability, and has crystallised the systemic risk inherent in a single maritime chokepoint for one of the world’s largest and fastest-growing oil consumers”.
Alibra said Peritus carried out feasibility work on the proposed 1200 kilometre Middle East to India Deepwater Pipeline (MEIDP) gas pipeline from the Gulf to India. This included studies of complex deepwater terrain such as the Indus Fan and Owen Fracture Zone, Alibra Shipping has noted. “These are major geological features beneath the Arabian Sea that make subsea pipeline construction particularly challenging. The proposed oil pipeline presents additional challenges due to the extreme depths involved and the operational requirements of transporting crude oil”.
The MEIDP gas line would potentially run to the Gujarat coast at depths of up to 3450 metres, making it one of the deepest offshore pipeline systems ever constructed. Officials estimate construction will take 05 to 07 years, with the pipeline possibly becoming operational between 2031 and 2033. The cost has been put at around $4.7 billion to $4.8 billion.
However, Alibra said: “The Indian Ministry of Petroleum and Natural Gas released statements in June confirming that no formal proposal or active negotiation is under consideration. “It will be interesting to see what happens next in this constantly changing geopolitical environment. It’s one of the world’s most important energy transit routes”.
Meanwhile, Crude oil exports from Oman to India in July were 133,000 barrels per day, down from 883,000 bpd in May and 747,000 bpd in June.
UK broker Gibson said Gulf producers still lack sufficient alternative export routes, as the Houthis target Red Sea exports. It added: “Iraq has access to the Mediterranean via Turkey and has been trucking fuel oil via Syria, but is vulnerable to regional politics and bilateral relations. As regional producers push ahead with expanding their export options outside of Hormuz, monitoring the development of these projects is critical to determining longer-term demand trends for tankers”.
At the same time, Saudi Arabia is considering expanding its pipeline to the Red Sea by up to 2 million bpd. On the otherside, Kuwait has said it is in discussions on how to expand the system to accommodate Kuwaiti barrels.
The UAE meanwhile is pushing ahead with a second pipeline to Fujairah, which will double capacity to 3.6 million bpd and provide a sufficient hedge to any future Hormuz disruption. The pipeline could be operational later in 2027 once the associated port infrastructure is complete. “The key will be which pipelines actually get built and what utilisation levels they run to”, Gibson said. Before this year, exports from Yanbu on the Saudi Arabian Red Sea coast rarely exceeded one-third of export capacity, Gibson noted. The same could apply to Iraqi westbound pipelines, which would primarily meet European demand.
However, these developments are envisaged to have limited impact on product tankers. “Asian buyers would prefer to load out of the Gulf in normal circumstances, and given the demand growth is primarily in the east, westbound export routes would likely be underutilised”, Gibson has said. In the UAE, the impact on tankers would be limited, Gibson believes. The company added: “If exports permanently shift to Fujairah, a small loss in demand would materialise, but this would likely be offset by rising Emirati production. The biggest impact therefore is likely to be on tankers carrying Iraqi volumes to Europe on VLCCs and suezmaxes, which averaged around 700,000 bpd in 2025”.
The effect on product tankers is likely to be negligible, with only Saudi Arabia currently considering a products pipeline to the Red Sea, Gibson explained, while advocating that the tanker market itself would be less vulnerable to cargo loss if uncertainty continued for years to come. “Yet, pipelines themselves face security challenges, being hard to defend, particularly in countries where rebel groups and foreign-backed militias also operate, compounded by an era where low-cost drone warfare reduces the sophistication required to disrupt exports”, Gibson has cautioned simultaneously.
Team Maverick.
