Navigating the Hormuz dilemma

THE US war on Iran has exposed the fundamental strategic vulnerability of the Arab Gulf states. The double blockade of the Strait of Hormuz by Iran and the US has significantly affected the oil and gas exports of the GCC states.

The impact has varied from state to state. Qatar, Bahrain and Kuwait have been the most affected GCC countries due to their overwhelming dependence on Hormuz for exports. Saudi Arabia and the UAE have managed to partially mitigate the disruption by diverting some oil flows through Yanbu and Fujairah, respectively, yet these alternatives possess limited capacities and are not a complete substitute for the Hormuz route.

Even if the conflict is over and the oil supplies resume, the GCC countries cannot guarantee uninterrupted oil supplies to international partners during another crisis in the future. This is mainly because the Strait of Hormuz proved to be a central pillar of Tehran’s deterrence strategy against the US during the recent conflict. It is highly likely that Tehran will continue to use Hormuz as a deterrent during any future external aggression.

Hence, uncertainty over the future of Hormuz will continue to haunt the Arab Gulf countries’ strategic thinking. This emerging challenge may be termed as the ‘Hormuz dilemma’.

Energy-exporting Arab Gulf states as well as Asian importing nations are considering various strategies to overcome Hormuz dilemma. This includes considerations of expanding capacities of national strategic oil reserves, and finding alternative markets and supply routes.

The Hormuz dilemma has provided Islamabad a strategic opportunity to pitch the idea of ‘renting oil and gas storage facilities’ to the Arab Gulf states.

The principal objective of establishing strategic oil and gas storage facilities of the Arab Gulf countries in Pakistan would be to ensure that buyers can receive acceptable substitutes of already stored Qatari LNG, Emirati oil, Bahraini petroleum products and, potentially, Saudi crude from facilities located along Pakistani coastal areas and transported through Gwadar, Port Qasim or other designated energy hubs during periods when the strait is closed.

Islamabad has an opportunity to pitch the idea of ‘renting oil and gas storage facilities’ to the Arab Gulf states.

For major Asian energy consumers such as South Korea, Japan, China and others, this arrangement would provide a credible energy assurance mechanism during any future conflict involving Iran and the Strait of Hormuz. Strategic reserves in Pakistan could function as an insurance policy against geopolitical instability for countries that remain heavily dependent on Gulf energy supplies and exposed to disruptions in Hormuz.

Pakistan is particularly well-suited for such an arrangement. During the over 100 days of armed hostilities between the US and Iran, it emerged as one of the few countries in the region that maintained cordial relations with both Iran and the Arab Gulf states. In case of any conflict, Tehran would be less likely to target GCC strategic reserve facilities located inside Pakistan’s territory. As a trusted partner with a degree of deterrent capability and diplomatic credibility, Islamabad can host strategic petroleum reserve facilities for GCC countries.

For the GCC states, such an arrangement could serve as one of the most practical alternatives to ensure continuity of oil and gas supply during future crises. It would help reassure international buyers that temporary disruptions in the Strait of Hormuz would not automatically translate into supply shortages.

Gulf producers would be better positioned to maintain contractual obligations and avoid declaring force majeure, as several exporters were compelled to do so after prolonged disruptions in the strait.

More importantly, strategic storage facilities in Pakistan would create a secondary export platform outside the immediate conflict zone. This would strengthen the resilience of GCC energy supply chains and reduce excessive dependence on a single maritime chokepoint. In strategic terms, it would amount to geographical diversification of energy security.

For Pakistan, the proposal carries equally significant benefits. Such an arrangement would also help Pakistan diversify and deepen cooperation with the Arab Gulf states beyond a purely security-centric framework. Energy security, strategic logistics, infrastructure development, port management and maritime cooperation could become new pillars of Pakistan-GCC engagement. This would elevate Pakistan’s role from a security partner to a comprehensive strategic stakeholder in Arab Gulf stability.

This strategy also aligns with Pakistan’s ambition to be recognised as a regional security stabiliser. By hosting strategic reserves, Islamabad would contribute directly to the resilience of regional energy markets and help mitigate the economic consequences of future conflicts for Asia and beyond.

The concept would also complement Pakistan’s broader geo-economic ambitions. Additionally, Islamabad could derive substantial financial benefits from such arrangements. Gwadar Port, in particular, could evolve into a regional energy logistics hub connecting Arab Gulf producers with Asian consumers.

Storage facilities, pipelines, refining infrastructure and associated services could attract significant foreign investment and create long-term economic opportunities. Port handling services, storage fees, security provisions, logistics management and related infrastructure development could generate much-needed foreign exchange earnings. These facilities would stimulate local economic activities in Sindh and Balochistan.

However, the success of such an ambitious initiative would depend on Pakistan’s ability to overcome significant governance and implementation challenges. The construction of large-scale strategic petroleum and LNG storage facilities would require substantial land allocation and acquisition, long-term infrastructure planning, regulatory approvals and coordination among multiple federal and provincial institutions. Pakistan’s bureaucratic procedures have historically slowed the execution of major infrastructure projects.

The Hormuz dilemma is, therefore, not merely a challenge for the Arab Gulf states; it is also an opportunity for regional innovation. While the Strait of Hormuz will remain a critical artery of global energy trade, recent events have shown that relying exclusively on a single route is increasingly risky.

Pakistan can transform a regional crisis into a strategic opportunity by offering itself as a secure location for strategic petroleum reserves, that can serve the interests of the Arab Gulf states, Asian energy consumers and Pakistan itself.

The writer is a strategic analyst of international security. The views expressed are his own.

X: @itskhurramabbas

Published in Dawn, June 14th, 2026 ...