Gulf states to revisit pipelines to bypass Hormuz; Mayer Brown commentary

“Markets are shifting from dislocation to rebalancing and structural response. The focus is now understandably on optionality and diversification, reflecting how exposed existing supply routes are.

"The constraint is that the alternatives are not straightforward. Existing pipeline infrastructure is often single-commodity and still reliant on onward shipping, so it reduces pressure in one part of the system while leaving exposure elsewhere. Replicating that at scale, particularly across borders, is significantly more complex.

"Cross-border pipelines have historically been difficult to deliver in practice. They require alignment across multiple jurisdictions and regulatory frameworks, clarity over how gas inventory flows are managed, and guaranteed long-term volumes to support what are typically very high-cost, long-dated investments. They offer less destination flexibility than LNG and are hence more exposed to particular market or demand-side risk. Pipeline projects of this nature also depend on coordination between national stakeholders with differing priorities, which has often proven difficult to sustain.

"That tension is now feeding into capital allocation. The paradigm is that there is a growing premium on delivery flexibility and execution certainty, but also more caution around large-scale, capital-intensive infrastructure projects. What this highlights is that existing oil and gas supply structures are less resilient than assumed and changing that is considerably harder than recognising the need.”

Read the article online at: https://www.worldpipelines.com/business-news/09042026/gulf-states-to-revisit-pipelines-to-bypass-hormuz-mayer-brown-commentary/