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The administration announced new economic sanctions on Iran to ease the Strait of Hormuz bottleneck while oil producers build bypass pipelines.

The administration announced new economic sanctions aimed at loosening Iran's hold on the Strait of Hormuz, a critical maritime chokepoint that handles roughly 20% of global oil flows. To mitigate the impact of the disruption, Middle East oil producers are developing several pipeline alternatives to bypass the strait. Saudi Arabia is utilizing its East-West pipeline, which can move up to seven million barrels per day, to redirect exports. The United Arab Emirates is expanding its infrastructure with the Habshan-Fujairah and proposed West-East pipelines. Iraq is also pursuing multiple routes, including the Kirkuk-Ceyhan system and a potential revival of the Kirkuk-Baniyas corridor through Syria. While these infrastructure projects provide essential redundancy, analysts suggest they cannot fully replace the Strait of Hormuz in the near term. Most oil and liquefied natural gas infrastructure was designed for the strait, and many bypass routes remain vulnerable to attack. Consequently, consumers are expected to face continued price volatility and elevated costs for fuel and food over the next year.

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