Goldman Sachs reports 60% of Gulf oil exports may bypass Hormuz by 2028
New pipeline networks in Saudi Arabia and the UAE are quietly rewriting the geopolitics of global oil supply
For decades, the Strait of Hormuz has been the world’s most important oil chokepoint, a narrow sliver of water between Iran and Oman through which roughly 20% of all global petroleum liquids pass every single day.
Goldman Sachs now thinks that lever is getting shorter.
In its mid-2026 analysis, Goldman found that Gulf producers are systematically rerouting crude exports away from Hormuz through alternative pipeline infrastructure, to the point where as much as 60% of Gulf oil exports could bypass the strait entirely by 2028.
The pipes that change everything
Saudi Arabia’s East-West pipeline routes approximately 60% of Saudi Aramco’s shipments to the Red Sea port of Yanbu, completely sidestepping Hormuz.
The UAE’s Fujairah pipeline, which empties into a terminal on the Gulf of Oman outside Hormuz’s choke zone, currently handles up to 1.8 million barrels per day. A second pipeline is under construction targeting an additional 1.5 million bpd of capacity by early 2027.
Combined, Saudi Arabia and the UAE already command roughly 4.7 million bpd of bypass capacity, with further infrastructure discussions reportedly underway as of June 2026.
Iran, for its part, built its own bypass in the form of the Goreh-Jask pipeline, designed to route crude to a terminal east of the strait. Capacity sits at 300,000 bpd, but actual utilization through 2024 and 2025 was minimal.
What Goldman’s numbers actually mean for markets
Goldman’s base case, as of June 2026, is that oil flows through Hormuz normalize to around 70% of pre-war levels following any major disruption.
Goldman’s analysis implies that the geopolitical risk premium that has historically inflated crude prices could compress as bypass capacity expands.
The Strait of Hormuz is not becoming irrelevant. At 70% of pre-war flow levels post-disruption, it remains consequential. But the days of Hormuz as a near-perfect instrument of geopolitical leverage over global oil markets appear to be numbered, and the timeline is now measured in pipelines already under construction rather than ones still on drawing boards.