Georges Elhedery, CEO of HSBC
Georges Elhedery, CEO of HSBC, listens during a meeting between China's President Xi Jinping and a group of foreign executives at the Great Hall of the People in Beijing on March 28, 2025. Getty Images

The Strait of Hormuz, one of the world's most important energy shipping routes, could become largely unnecessary within five years as Gulf countries invest in alternative pipelines and ports amid ongoing conflicts, HSBC Group Chief Executive Georges Elhedery said Tuesday.

Speaking at the bank's Future Forum in Dubai, Elhedery said the Iran war is accelerating investment in new transport infrastructure that could allow Gulf exporters to move oil without relying on the strategic waterway.

"We do see this region being able to recover and then continue growing. It will mean a lot of investment," Elhedery said, according to Reuters.

"Of course, we do wish and hope to see a resolution to the conflict ... But Hormuz, probably in five years' time, may become redundant," he added.

The conflict is forcing governments and energy companies to reconsider how they move exports from the Gulf to international markets.

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Before the war, roughly 20 million barrels of oil and petroleum products passed through Hormuz daily, accounting for about one-quarter of global seaborne oil trade in 2025, according to the International Energy Agency.

The narrow passage between Iran and Oman connects the Persian Gulf to the Arabian Sea, serving major exporters including Saudi Arabia, Iraq, Kuwait, Qatar, the United Arab Emirates and Iran.

Approximately 80% of the oil and petroleum products shipped through the waterway were destined for Asian markets.

The Middle East, North Africa and Turkey have approximately $1.4 trillion in planned and unawarded infrastructure projects, HSBC said Monday, citing data from Dubai-based construction intelligence provider MEED.

Of that amount, $872 billion consists of identified project packages offering opportunities for contractors, developers and international investors.

The broader pipeline increased from $792 billion in January 2023 to $1.22 trillion in January 2026, before reaching $1.4 trillion this month. Those investments cover infrastructure across the wider region, not exclusively oil pipelines or projects designed to bypass Hormuz.

Elhedery said substantial capital would be needed to develop new logistics networks, including energy pipelines connecting production facilities to export terminals outside vulnerable shipping routes. He also expressed confidence in the region's ability to attract international investment despite the conflict.

A recent HSBC survey of more than 1,600 business leaders and approximately 820 institutional investors found that the Gulf remained an attractive investment destination. However, the region faces considerable economic pressure.

The World Bank's October economic update forecast an economic contraction across the Middle East, North Africa, Afghanistan and Pakistan in 2026, after growth of 3.3% in 2025.

The conflict has disrupted energy exports, aviation, tourism and logistics, affecting businesses beyond the oil industry.

Saudi Arabia and the UAE already operate pipelines that allow some crude oil exports to bypass Hormuz.

Saudi Arabia's East-West pipeline transports crude from the kingdom's eastern oilfields to Yanbu on the Red Sea, while the UAE's Abu Dhabi Crude Oil Pipeline connects production facilities to Fujairah, outside the strait.

The IEA estimates that the two countries have approximately 3.5 million to 5.5 million barrels per day of available pipeline capacity for rerouting shipments.

Saudi Aramco increased the capacity of its East-West system to 7 million barrels daily in March 2025, although sustained operations at that level had not been fully tested as of early 2026.

The UAE pipeline has a capacity of approximately 1.8 million barrels per day and was transporting around 1.1 million barrels daily before the conflict.

Other major Gulf exporters have fewer options for getting their oil to international markets without passing through the strait.

Natural gas presents a separate challenge. More than 110 billion cubic meters of liquefied natural gas moved through Hormuz in 2025, with Qatar depending on the route for most of its LNG exports. Replacing those shipments would require additional gas transport and export infrastructure, rather than simply expanding crude oil pipelines.