The regional crisis following the Iran-US/Israel war has forced the Gulf Cooperation Council (GCC) to build redundancy at speed. Jordan’s Aqaba Port recorded a 155% rise in transit cargo in the first half of 2026 as trade rerouted around the blockade. Saudi Arabia pushed crude exports through its East-West pipeline to Yanbu on the Red Sea from around 2 million barrels per day before the crisis, to more than 5 million by early June 2026. The UAE’s Abu Dhabi Crude Oil Pipeline kept moving crude to Fujairah, outside of the Strait of Hormuz entirely, with a second line due for completion in 2027 that will double that capacity.
Seven months into the crisis, this is more than just an emergency workaround to a temporary shock. It has become a defining constraint on Gulf Cooperation Council (GCC) economies, how they trade, and whether the infrastructure that has been built can cope with protracted disruption.
Regional growth has contracted alongside a wider Middle East and North Africa (MENA) downturn of 3.3%, the deepest downturn in four decades. This is a deeper contraction than the 2.5% recorded during the 2020 pandemic. The economic situation is largely driven by three factors – the disruption in the Strait of Hormuz, slow recovery in hydrocarbon production, and weaker trade, investment and services activity.
The economic downturn is also impacting the region’s reputation. The Hormuz blockade has raised concerns about the reliability of Gulf energy supply, for example, with demand shifting toward other sources, including Russia.
And yet, the region is not without options. The same crisis that has exposed vulnerabilities has also accelerated a build-out of alternative infrastructure – pipelines, ports, causeways, and railways – that the Gulf will still be using long after this crisis ends.
From Assets to a System: What the Crisis has built
Every crisis is also a stress test. The relevant question for Gulf planners is not simply how to manage the current disruption, but also to understand how regional supply chains would function under a full closure of the Strait and, crucially, what capacity already exists to absorb that shock.
Three answers have emerged this year, each solving the problem in a different way.
The first is energy redundancy. Saudi Arabia and the UAE are the only Gulf producers with operational crude pipelines capable of rerouting substantial volumes around Hormuz, and both used them: Riyadh through Yanbu, Abu Dhabi through Fujairah. Oman adds a third geographic option by default – its ports at Duqm and Salalah already face the Arabian Sea rather than the Gulf.
The second is new logistics corridors, built or accelerated specifically in response to the crisis. Bahrain’s planned King Hamad Causeway will blend road freight and rail into a second link to Saudi Arabia. The Hafeet Rail network, a $2.5 billion joint venture between Etihad Rail, Mubadala and Oman’s Asyad Group, is set to move freight between Sohar and Abu Dhabi in 100 minutes, with a preliminary agreement already in place for seven container trains a week once the line is complete.
The third, and the most advanced in scale, is the GCC Railway Project. First proposed in 2004 and considered one of the most advanced infrastructure initiatives in the region, the 2,117 km (1,315 miles) network is designed to connect Kuwait, Bahrain, Qatar, KSA, UAE and Oman, carrying both freight and passengers along a corridor roughly parallel to the Hormuz coastline.
Originally conceived as a vehicle for deeper political, social, and economic integration, its role has now shifted. The railway is emerging as a critical piece of regional supply-chain resilience with the Red Sea and the Strait of Hormuz increasingly weaponised.
The project’s value also extends beyond throughput. Large-scale rail construction generates employment opportunities across engineering, logistics, and operations. While station development tends to catalyse surrounding urban and industrial growth. The Hejaz Railway’s role as a supporting pillar to KSA Vision 2030, including logistics integration with Dammam’s Second Industrial City, is one example of this spillover effect.
None of these three measures (redundancy, logistics, and rail) will entirely replace water passageways for trade, which will remain critical in transferring petrochemicals and goods in bulk. Rather, each will spread the risk that reliance on Hormuz used to carry and will act as a multiplier for growth in region.
Two Gaps to Close
Realising this potential will depend on closing two structural gaps.
The first is the interoperability challenge at the regional level. Take the GCC Railway Project as an example – here, the GCC Railway Authority sets the mandate, individual member states remain responsible for constructing their own tracks, procuring their own vendors and, in practice, also working to their own technical specification.
In the case of the Hejaz Railway (which spans Türkiye, Jordan, Syria and Saudi Arabia), this problem has already been noted. The historic narrow-gauge alignment is incompatible with the 1,435 mm standard gauge used elsewhere in the network, and cannot support a modern freight service without significant upgrading. The same principle applies beyond rail – the efficiency of a causeway, a corridor or a pipeline relies on the shared standards between partners.
The second challenge is border and customs clearance. The challenge here is not about whether goods are permitted to move, but whether clearance can be granted without causing severe delays or increased costs. These are risks that could potentially harm the railway’s advantage over sea transit. At the moment, the GCC has already operationalised its “First Point of Entry” (p. 2) and “In-Bond Transit” models, which allow customs verification at origin and destination rather than at every border crossing.
This is a useful foundation but must be consistently applied across all six member states. This will likely determine whether the railway can function as a genuine end-to-end infrastructure as opposed to a series of nationally managed, geographically adjacent segments.
Moving Forward: Positioning is Possible
There is no reliable basis for predicting when, or whether, conditions in the Strait of Hormuz will stabilise. For GCC policymakers, the question though, is less about when the crisis will end, and more about how the region can insulate itself against the next crisis.
It is unlikely that the construction projects from this year will replace the Strait of Hormuz as the region’s primary trade engine. However, in times of shock, together they can serve as a hedge against its closure or disruption – provided the standards and customs work behind them keep pace with the construction.
That is where GCC policy attention should now be directed, to ensure that the projects that are underway can operate as one coherent network when the region needs them most.
