U.S. and Saudi Arabia Plan Infrastructure Project to Bypass Iran's Oil Chokepoint Control

WASHINGTON AND GULF ALLIES PURSUE INFRASTRUCTURE BYPASS TO CIRCUMVENT IRAN’S CONTROL OF CRITICAL OIL ROUTES

Iran’s formalized willingness to use two of the world’s most vital maritime chokepoints as geopolitical leverage has set U.S. policymakers and Gulf state partners on a course to redirect global energy flows through routes beyond Tehran’s reach. Following Iran’s closure of the Strait of Hormuz and interference in the Bab el-Mandeb Strait after “Operation Epic Fury” in February, the strategic calculus in Washington and Gulf capitals shifted decisively. The Strait of Hormuz, dominated by Iranian forces along its eastern stretch, and the Bab el-Mandeb Strait, where Iran-backed Houthis operate, together control the movement of oil and liquefied natural gas to major Asian markets and European ports.

The most visible institutional response involves a private consortium called MERA Oil, announced at the end of last month as a joint venture between the U.S.’s MWG Enterprises, the Patel Family Office, and PWS, an associate of the Saudi-headquartered AHQ Group. The partnership has spent three years evaluating sites for a planned US$5 billion integrated refinery and energy export corridor positioned deliberately outside the Strait of Hormuz. The facility would comprise a 200,000-barrel-per-day refinery, deepwater port infrastructure, large-scale storage capacity for crude and refined products, and marine export facilities. The consortium states the location is designed to provide route-resilient export capacity with direct access to international shipping lanes. Mechanical completion of the first phase is targeted for the end of 2029, with commissioning and commercial operations to follow.

Two locations appear most likely to satisfy the consortium’s operational requirements and alignment with the six Gulf Cooperation Council states: sites on the Gulf of Oman or Arabian Sea, specifically Fujairah in the UAE or Duqm and Salalah in Oman. Both would offer unrestricted access to the Indian Ocean, bypassing both critical straits entirely.

Meanwhile, this infrastructure initiative aligns with the India-Middle East-Europe Economic Corridor (IMEC), originally launched at the 2023 G20 Summit but stalled by regional conflict. U.S. planners now estimate the corridor could eventually divert approximately 60 percent of container traffic currently transiting the Strait of Hormuz. The corridor’s architecture comprises two integrated legs: an eastern maritime route linking India’s western ports to the Arabian Gulf, and a northern overland rail network running through Saudi Arabia and Jordan to Israel’s Port of Haifa, with short-sea shipping connecting onward to Europe. A 2026 wartime redesign anchors the eastern maritime leg in Oman rather than the UAE, allowing cargo from India to be unloaded entirely outside the Strait of Hormuz before transfer onto Arabian Peninsula rail infrastructure. Additional nodes through Egypt and Syria are under discussion to expand land-based alternatives. New legal frameworks, including the India-EU free trade agreement and the U.S. Senate’s Eastern Mediterranean Gateway Act, have formally designated Greece as Europe’s entry hub, according to a senior European Union security source.

A second, more secretive initiative under discussion involves construction of an overland pipeline across the Saudi desert to the Israeli border, where the Trans-Israel Pipeline (originally laid between 1968 and 1969) would transport crude northward to Mediterranean ports. That pipeline was developed as a joint venture between Israel and Iran under the Shah, transporting Iranian oil from the Red Sea port of Eilat to the Mediterranean port of Ashkelon, bypassing the Suez Canal. Israel’s Energy Minister Eli Cohen recently stated that “the Gulf countries do not want to be dependent on either Iran or the Houthis when it comes to their oil exports, which are their primary source of income. If you create a land route, you bypass both Iran and the Houthis. The best route is through the State of Israel.”

Prime Minister Benjamin Netanyahu has also endorsed the concept, noting that pipelines running west through the Arabian Peninsula to Israel’s Mediterranean ports would eliminate chokepoint dependencies. The proposal has gained traction within President Donald Trump’s core team. A senior Washington-based source working closely with the U.S. Treasury explained that the infrastructure would stretch across Saudi and Israeli land, providing a base for security force deployment and leverage extension across the region, particularly in support of the Abraham Accords. “If Iran or any of its backers attacked any part of the infrastructure, we would be fully entitled, along with Israel and our Gulf allies, to hit them harder than ever before, with the definitive goal of regime change,” the source stated.

Both strategies reflect Washington’s broader effort to establish control over oil and liquefied natural gas flows, reducing Beijing’s influence over energy supplies secured through Iran’s 25-year comprehensive cooperation agreement with China. Whether the legal frameworks, bilateral agreements, and capital commitments now in motion can be translated into operational infrastructure before the next confrontation at either strait remains the central question facing the officials and regulators overseeing these initiatives.