The conflict between the US and Iran is starting to change the economic model on which the Persian Gulf countries have built their development for decades. After years of large-scale investments in tourism, sports, real estate, megaprojects and artificial intelligence, more and more capital is being directed towards far more basic infrastructure - ports, oil pipelines and alternative trade routes.
The reason is the Strait of Hormuz - one of the most important transport arteries for global energy. The ongoing shipping difficulties have highlighted the vulnerability of Gulf economies, which depend on the narrow sea corridor between Iran and Oman for oil and gas exports, container shipping and goods deliveries.
Countries in the region are already investing billions of dollars in infrastructure to reduce their dependence on Hormuz. Some trade flows have been redirected to Saudi ports on the Red Sea and the east coast of the United Arab Emirates.
Ports are once again becoming a strategic asset
One of the most visible changes is in the UAE. Fujairah is gaining even greater strategic importance because it is located on the Gulf of Oman and ships can reach it without passing through the Strait of Hormuz.
The expansion of oil pipeline and port infrastructure should increase Abu Dhabi's ability to export crude oil on a route independent of the strait.
The change comes at a time when the logistics sector is suffering serious damage. According to the Financial Times, container traffic through the Strait of Hormuz has fallen dramatically, while transportation and insurance costs have increased. Jebel Ali in Dubai - one of the world's most important container ports - is among those affected by disruptions to trade routes.
Saudi Arabia increases the role of the Red Sea
Riyadh is also accelerating plans to reduce its dependence on the Persian Gulf.
A key asset is the Petroline system, which connects the Abqaiq oil hub with Yanbu on the Red Sea. The facility's capacity has been increased from an initial around 5 million to approximately 7 million barrels per day.
This allows Saudi Arabia to transport a significant part of its oil to the west coast without tankers having to pass through Hormuz.
But this route is not without risks. The Red Sea outlet makes supplies dependent on security around the Bab el-Mandeb Strait – another key transport corridor, which in recent years has also been subject to serious geopolitical tension.
Qatar is among the most vulnerable
The situation is particularly complicated for Qatar, whose economy relies heavily on the export of liquefied natural gas.
Unlike Saudi Arabia and the UAE, Doha has much more limited options to build an alternative route for the huge quantities of LNG that traditionally leave the country through the Persian Gulf.
This makes the security of Hormuz a direct economic factor not only for Qatar, but also for the Asian markets, which are among the main buyers of Qatari gas.
Iraq seeks access to three seas
One of the most interesting changes is observed in Iraq. Baghdad is accelerating projects that could give the country alternative export routes to the Mediterranean and Red Seas.
Among them is the development of the Basra-Hadith corridor. The idea is to transport oil from the southern part of the country to the west, from where connections could potentially be developed to the Turkish port of Ceyhan, the Syrian port of Baniyas, and the Jordanian port of Aqaba.
In 2026, the Iraqi government approved $1.5 billion in funding for the Basra-Hadith project, which is designed to have a capacity of about 2.5 million barrels per day.
At the same time, relations with Turkey are becoming even more economically important for Baghdad due to the possibility of exporting through Ceyhan to the Mediterranean Sea.
A new transport map of the Middle East
The changes are already going beyond the oil sector. Turkey and Saudi Arabia are exploring the possibility of a rail link through Syria and Jordan, which could become part of a broader land transport system between the Persian Gulf and Europe.
The crisis around Hormuz is thus accelerating a process that could permanently change the economic geography of the region.
For decades, Gulf states have benefited from highly efficient and relatively cheap transport routes. The new geopolitical environment is forcing them to invest in spare capacity – even when it seems more expensive and economically inefficient in calm times.
The consequences are already being felt in financial markets. On September 21, most Gulf stock exchanges closed lower amid continued regional tensions. Saudi Arabia’s main index lost 0.6% and Abu Dhabi’s – 1.6%, according to Reuters data.
In the long term, the most important consequence may not be a temporary decline in trade, but a shift in investment priorities. The security of transport corridors is transforming from a geopolitical issue into a key factor in the allocation of capital in the Gulf.