Gulf trade and energy security face risks amid maritime disruptions

The crisis in the Persian Gulf is evolving beyond the Strait of Hormuz, impacting the reliability of alternative energy and trade routes. Saudi Arabia’s East–West Pipeline, designed to bypass the Strait by transporting oil from eastern fields to the Red Sea, faces challenges following its operational halt on September 15. Even if the pipeline resumes, the maritime route through the Bab el-Mandeb strait and the Red Sea remains vulnerable to regional actors like Ansar Allah.

Beyond energy, the disruption has caused a collapse in broader commodity trade. Data indicates a significant drop in the transit of sulfur, nitrogenous fertilizers, limestone, and corn through the Strait of Hormuz. This has forced businesses and governments to seek expensive land and air alternatives. In the Gulf, the rising cost of transport has led to price spikes for essential goods, such as rice, which can now cost up to three times more. Governments in countries like Qatar, Kuwait, and Bahrain are facing increased pressure to subsidize markets to mitigate supply chain impacts, while Saudi Arabia may face spending constraints.