Is Hormuz open? Trump’s toll threat intensifies rush to bypass the Strait

President Donald Trump‘s threat to impose a 20% fee on cargo passing through the Strait of Hormuz and renewed U.S.-Iran tensions have revived the Gulf’s urgent search for oil export alternatives.

From Saudi Arabia’s East-West pipeline to the United Arab Emirates’ export infrastructure outside the strait, Gulf producers are increasingly relying on alternative routes to keep crude moving as attacks and shipping disruptions expose the risks of depending on Hormuz.

The United Arab Emirates is reportedly looking to build a new port and container terminal on its east coast, in a bid to bypass the Strait of Hormuz and reduce dependence on its Jebel Ali hub — the premier logistics powerhouse in the Middle East.

Dubai-based port operator DP World is said to be in talks to develop the port in the coastal area of Fujairah, as well as a new terminal at the existing harbor in the same emirate, the Financial Times reported on Monday, citing unnamed sources familiar with the matter. DP World declined to comment when contacted by CNBC.

Ahmed bin Sulayem, chief executive of the Dubai Multi Commodities Centre, said reports of the UAE looking to build a new port and terminal outside the strait represent both an “immediate action” but “also a medium- and long-term plan.”

“Until conditions in the Strait of Hormuz are safer, as of now, I don’t believe there will be much focus on shipping lines going there,” bin Sulayem told CNBC’s “Squawk Box Asia” on Tuesday.

The latest crisis has shown both the value and the limits of those alternatives. Saudi Arabia has been diverting roughly 4 million barrels a day through its East-West pipeline, according to Andy Lipow, president of Lipow Oil Associates.

Saudi Arabia’s East-West pipeline network, or Petroline, is a roughly 750-mile system that transports crude across Saudi Arabia, connecting Abqaiq on the oil-rich kingdom’s eastern Gulf coast to the port of Yanbu on the Red Sea. The pipeline is estimated to have a total design capacity of 7 million barrels per day, following some recent expansions.

Riyadh has been diverting about four million barrels a day of crude oil from their east-west pipeline over to Yanbu, loading tankers, many of which are going out the Red Sea, data provided by Lipow showed.

Bob McNally, president of Rapidan Energy Group, described Saudi Arabia’s ability to move additional crude through the route as a major success.

“What real master stroke was Saudi Arabia being able to put all that extra oil through the Yanbu pipeline, and it looks like UAE, with the help of the U.S….