HSBC Chief Says Alternative Gulf Energy Routes Could Reduce Hormuz Dependence Within Five Years

Dubai — Gulf nations could substantially reduce their reliance on the Strait of Hormuz over the next five years by developing alternative routes for transporting energy, HSBC Group Chief Executive Georges Elhedery said on Tuesday.

The conflict involving Iran has exposed the vulnerabilities associated with the strategic waterway, which previously carried approximately one-fifth of global oil and liquefied natural gas trade.

Speaking at the HSBC Future Forum in Dubai, Elhedery said countries across the Gulf were investing in pipelines and port infrastructure to establish alternative channels for delivering energy supplies to international markets.

He said these developments could eventually render the Strait of Hormuz redundant, though the timeline remains a possibility rather than a confirmed deadline for completing the required infrastructure.

Elhedery also voiced confidence in the region’s ability to recover from the current disruption and sustain economic growth, provided significant resources were committed to future development.

The strategic significance of the Strait of Hormuz has made the conflict a major concern for energy markets. Disruptions to shipping through the passage can interfere with crude oil and liquefied natural gas deliveries, creating supply risks for both producers and importing countries.

Developing additional pipelines and export terminals would give Gulf nations greater flexibility in moving energy supplies. It could also reduce their dependence on a single maritime route for regional exports.

The potential investment requirements are considerable. HSBC reported that the Middle East, North Africa and Turkey had $872 billion in individual project packages available, within a broader $1.4 trillion infrastructure pipeline comprising projects that had been planned but not yet awarded.

These figures appeared in an HSBC report released on Monday, drawing on data from MEED, a Dubai-based platform providing market intelligence on the construction industry.

A recent HSBC survey of more than 1,600 business leaders and around 820 institutional investors also showed that respondents continued to regard the Gulf as an attractive destination for investment.

Despite that confidence, the region faces a difficult economic outlook. The World Bank projected last week that the Middle East, North Africa and Pakistan region would contract by 1.3% this year as a result of the war.

The forecast follows growth of 3.3% in 2025. The World Bank anticipates a strong but uneven recovery in 2027.

Against this backdrop, infrastructure investment could become a central component of the region’s long-term economic strategy, even as governments and businesses manage the immediate consequences of the conflict.

Plans to diversify energy export routes are also unfolding amid disruptions to the region’s investment calendar caused by security concerns. Elhedery was among the global financial leaders expected to attend Saudi Arabia’s flagship investment conference, scheduled for the following week.

The conference was postponed to 2027 on Monday after deadly strikes in Riyadh by Yemen’s Iran-backed Houthi group.

For energy companies and investors, the development of alternative export infrastructure offers a long-term investment opportunity. However, eliminating dependence on the Strait of Hormuz would require extensive funding and implementation, leaving the timing and extent of any reduction in reliance uncertain.

Elhedery’s remarks highlight how the conflict is driving Gulf governments to reassess the infrastructure needed to safeguard energy exports against future disruptions.