Aramco Starts Work on Hormuz Bypass, Targets 10 Million bpd Pipeline Exports

Aramco has begun engineering work to expand its East-West crude pipeline toward a 10 million bpd export target, CEO Amin Nasser told analysts on Tuesday. That is the kingdom's answer to the effective blockade of the Strait of Hormuz, the chokepoint that previously carried 20% of global oil supplies.

The number matters more than the announcement itself. Saudi Energy Minister Prince Abdulaziz bin Salman said last month the kingdom wants to lift pipeline export capacity to as much as 10 million bpd by repurposing a domestic gas pipeline and investing in the existing East-West network. The East-West line currently moves up to 7 million bpd of crude across the kingdom to Red Sea terminals, bypassing Hormuz entirely. Nasser has previously called it a critical lifeline, and with good reason — the line has been attacked several times during the US-Iran war.

What has actually been sanctioned?

Not much, on paper. "With regard to the expansion to our East-West pipeline and the additional networks that we are building, this work has already started," Nasser said on the call following third-quarter results. He confirmed engineering work is underway on export routes beyond Aramco's three existing options: the Gulf via Hormuz, the Bab el-Mandeb Strait, and the Suez Canal.

But he drew a firm line before final investment decisions. Nasser said Aramco will not disclose details on the new export routes until FIDs (final investment decisions, the point at which a company commits capital) are made. So the 10 million bpd figure remains a government target, not a sanctioned project. No capex, no timeline, no route specifics. Takeaway: the work is real, but the money is not yet committed.

A storage play abroad

Aramco is also exploring additional crude storage capacity abroad, Nasser said. That fits a broader pattern — producers who can no longer rely on Gulf transit are pre-positioning barrels closer to demand centers. Again, no volumes or locations were disclosed. This is appraisal-stage strategy, not confirmed investment.

The freight shock behind the decision

The commercial logic is blunt. More than 130 attacks on tankers have been reported so far during the Iran conflict, Nasser said, mainly against VLCCs (very large crude carriers, each able to haul 2 million barrels). Freight rates have surged more than 15 times from a year ago. At those levels, pipeline bypass capacity is not optional infrastructure — it is margin protection.

Nasser also flagged the spillover beyond oil markets. "Higher transportation costs, fertiliser shortages, and impacts on food and consumer goods are feeding into inflationary pressures across the global economy," he said in a statement to Reuters. That is analysis from a CEO with a stake in the story, not a neutral reading of the data. Still, the freight numbers back him up.

The quarter helps fund the build. Aramco reported a more-than-one-third surge in third-quarter profit on Tuesday, giving it headroom for infrastructure spending that smaller producers cannot match.

What did Nasser not say?

No startup date for any expanded capacity. No FID date. No detail on which gas pipeline gets repurposed, or what the additional export routes under study might be. The company that publishes reserve figures to the decimal is keeping its bypass plans opaque — likely deliberate, given the security record of the East-West line itself.

On supply policy, Nasser kept the door open. "Demand fundamentals remain strong and the world cannot afford to plan its energy future around short-term market conditions. We remain ready to rapidly ramp up production when the situation calls for it," he said. Spare capacity remains Aramco's strongest card, and he played it without committing to use it.

Watch item: the FID disclosure on the new export routes, and whether the 10 million bpd pipeline target gets a sanctioned project name, budget and completion date attached.