Whatever the outcome of the war with Iran, it has already delivered a lesson the world cannot afford to ignore. A single regime has decided to exert control over a 21-mile passage, and as a result, we are living through the worst energy crisis the world has ever seen.
The near-closure of the Strait of Hormuz has removed 9 million to 10 million barrels of crude oil from global markets each day, but that is only the beginning of the economic damage. The present crisis is worse than the Arab oil embargo of 1973, and broader than the Russian gas cutoff that followed the 2022 invasion of Ukraine. Roughly 20 percent of the world’s daily supply of liquified natural gas is gone. Five million barrels a day of refined products—the diesel that moves goods, the jet fuel that keeps aircraft flying—are missing. So are the fertilizers on which farmers rely to feed billions, the helium used to manufacture semiconductors and run hospital MRI machines, and the petrochemical feedstocks that underpin modern manufacturing.
The governments of Sri Lanka, Thailand, and Pakistan have already adopted a four-day workweek to conserve energy, and others will follow. Malaysian and Indonesian factories are reducing capacity. Airports across Asia are limiting flights—not because fuel is unaffordable, but because there is so little to be had. The petroleum derivatives that form the materials of daily life are disappearing.
[Idrees Kahloon: Why Trump thinks he can walk away from the Strait of Hormuz]
The vulnerability of the global energy supply to Iranian coercion cannot be remedied by any military operation, diplomatic cease-fire, or drawdown of strategic reserves. The only long-term solution is new infrastructure—making a massive, internationally coordinated investment in energy corridors that bypass the Strait of Hormuz entirely.
Just two major pipeline systems are currently capable of moving Gulf energy to global markets without going through the Strait of Hormuz, and they are running near or at their maximum capacity. Both carry crude oil, but not the refined products the world is running out of. And a substantial portion of the Gulf, possessing some of the world’s most significant hydrocarbon reserves, has no bypass route at all.
If the United States—and the world—want to avoid a recurrence of the present crisis, they will need to help double the capacity of the two pipelines that exist, build refined-product infrastructure alongside them, and construct a new corridor for the producers who have none.
Saudi Arabia’s Petroline is today the single most important piece of energy infrastructure on the planet. The 746-mile pipeline, running from the eastern oil fields to the Red Sea port of Yanbu, was built during the Iran-Iraq War precisely to avoid an Iranian embargo, and it is performing as intended. But this single pipeline, even operating at maximum capacity, cannot meet demand. It requires additional trunk lines, expanded pump stations, and greater port capacity at Yanbu.
More important, the world is short not only on crude oil; it is desperately short on petroleum products. Crude pipelines do not move diesel or jet fuel or the liquefied petroleum gases that hundreds of millions of people use to cook their food. Those products will require their own dedicated infrastructure built alongside the expanded crude pipeline—separate lines, separate terminals, and separate investment.
The United Arab Emirates’ Abu Dhabi Crude Oil Pipeline (ADCOP) connects inland oil fields to the port of Fujairah on the Gulf of Oman, completely circumventing Hormuz. The vision behind the project, which became operational in 2012, has been vindicated every day of this crisis. But with a capacity of roughly 1.7 million barrels a day, it leaves some 40 percent of UAE production without a bypass option. Fujairah already has the geographic advantages and port infrastructure to become the world’s most consequential energy hub outside the Strait. But first, the pipeline would need to have its capacity doubled, along with new lines added for refined products.
The third infrastructure challenge is the most urgent and the least discussed. Kuwait’s and Iraq’s southern oil fields, which contain enormous reserves that are crucial to global supply, do not have access to any bypass route. They are entirely exposed; almost every barrel they produce must transit Hormuz. The solution is constructing a modern, high-capacity pipeline corridor of oil, natural gas, and products from southern Iraq and Kuwait northward through Iraqi Kurdistan to the Ceyhan export terminal on Turkey’s Mediterranean coast. A version of this route—the Kirkuk–Ceyhan pipeline—already exists, but it is aging, its capacity is far below what is required, and its administration is politically fractured.
[Eliot A. Cohen: Three things the consensus gets wrong about the Iran war]
In both the Obama and Biden administrations, I spent years on diplomatic efforts to advance this concept, shuttling between Baghdad, Erbil, and Ankara, and producing little progress. Today’s crisis presents an opportunity to resolve the political differences that blocked such efforts in quieter times. The project is technically achievable but requires the political will, international financing, and American diplomatic leadership necessary to bring Turkey, the Iraqi central government, the Kurdistan Regional Government, and Kuwait to the table.
The current energy crisis is a problem for the whole world, so finding a solution cannot be left to the Gulf States alone. Saudi Arabia and the UAE have already demonstrated extraordinary foresight—the Petroline and ADCOP exist because their governments made long-horizon investments against risks that markets would never have funded. The nations of Europe, Asia, and the Americas that depend on Gulf energy have an interest in ensuring that similarly forward-looking investments are made today.
And it’s specifically in the interest of the United States to take the lead in such efforts, rather than lead a void that other actors—in particular, China—may seek to fill. The U.S. can help convene the Gulf States, the nations that consume energy, multilateral development banks, sovereign wealth funds, and private capital. The goal would be to make a strategic investment in shared global infrastructure—the same logic that animated the Marshall Plan, which was driven not by charity but by a recognition that a stable and prosperous world benefits America. Working through the U.S. International Development Finance Corporation in coordination with the World Bank, the U.S. could help anchor a broader coalition. When America puts capital on the table and sets the terms, others follow.
Consider what years of patient, unglamorous infrastructure investment have delivered in the recent past. When Russia invaded Ukraine in February 2022, a long-predicted energy crisis failed to become catastrophic thanks to a decade of little-noticed work: The Southern Gas Corridor brought Caspian gas through Georgia and Turkey into Southern Europe; LNG terminals built in Poland, Lithuania, and Greece ramped up imports; pipelines had their flows reversed to move gas in new directions. The infrastructure built before the crisis made the difference when it finally came. The same logic produced the U.S. Strategic Petroleum Reserve after 1973 and the International Energy Agency, which have helped buffer every major supply shock since, including this one.
The U.S. has already recognized the utility of building infrastructure through the region, helping to launch the India–Middle East–Europe Economic Corridor (IMEC) to bypass chokepoints and connect rail, energy, fiber-optic cables, and hydrogen pipelines from India through the Gulf to Europe. Building the capacity to bypass Hormuz could be seen as IMEC’s most urgent energy component.
[Karim Sadjadpour: Trump’s fundamental misunderstanding in Iran]
Some environmentalists oppose this sort of massive new investment in fossil-fuel infrastructure, arguing that it will slow the clean-energy transition. That objection misreads reality. Over the past 20 years, the world added more renewable-energy capacity and electric transport than almost anyone predicted possible—and yet fossil fuels still represent roughly 80 percent of the global energy mix, the same share as in 1980. Energy demand is growing faster than the supply of renewables can meet.
More fundamental, oil is not simply a fuel. It is the feedstock for plastics, pharmaceuticals, fertilizers, and synthetic materials that electricity cannot replace. Natural gas is the backbone of the petrochemical and fertilizer industries. Airlines do not run on wind power. Hospital MRI machines do not run on solar panels. Accelerating the transition is not only necessary; it is vital and worth pursuing—and the supply chains of the present must be secured simultaneously. They are not competing priorities.
Sooner or later, the Hormuz war will end, and a rare window for bold collective action will open. The question then will be not just what infrastructure gets built—but also on whose terms and through what alliances. The United States knows how to build the infrastructure of a more resilient world, and has helped do so before: in the Caspian, in the decade of European energy-security work that preceded and then survived Russia’s invasion, in IMEC, and in Central Africa’s Lobito Corridor. And now it also knows, more vividly than ever, what it costs not to do so.
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