US Energy Adviser Urges Gulf States to Build New Oil Routes Bypassing Strait of Hormuz

Almost seven months into a conflict that has reshaped the global energy landscape, top US officials emphasize that the battle over Middle East oil centers heavily on transportation routes rather than supply alone. Jarrod Agen, head of America’s Energy Dominance Council, stated that reducing reliance on the Strait of Hormuz is a primary objective.

Speaking with Hadley Gamble on On The Record with Hadley Gamble at the UN General Assembly, Mr Agen explained that the strategy focuses on redundancy by establishing multiple corridors that cannot be simultaneously disabled. Key partners like the UAE and Saudi Arabia are collaborating with the US to develop east-west routes and alternative pathways leading to Turkey and the Mediterranean. Mr Agen emphasized that President Trump is uniquely positioned to coordinate these international agreements.

Since the conflict involving Iran began in February, Brent crude has experienced massive volatility, swinging from $72 to a peak near $120 before stabilizing above $104 amid continuous attacks on maritime shipping. Traffic through the Strait of Hormuz has plummeted by approximately 95 per cent, causing war-risk insurance for tankers to skyrocket and pushing American gasoline prices to their highest points since 2023.

Addressing global refining imbalances, Mr Agen pointed out that US refining capacity is operating at 100 per cent, while Russia faces a 30 to 40 per cent decline and China maintains room for export growth. He stressed that reliable domestic energy supply directly influences national security and foreign policy.

While acknowledging that multi-billion dollar infrastructure commitments are required, Mr Agen argued that the long-term benefits justify the cost. This new security premium comes on top of baseline upstream spending projections ranging between $400 billion and $640 billion annually through 2030, as estimated by analysts at the International Energy Forum and S&P Global.

The administration maintains a core strategic bet that the Western Hemisphere should serve as the anchor for global energy security. Highlighting a major deal with Venezuela to open 17 prime fields in partnership with the US, Mr Agen noted that this initiative sends a strong message to the global market.

Regarding European energy policies, Mr Agen highlighted discussions from a recent G20 energy ministerial meeting in Houston that prioritized reliability, affordability, and energy security over strict net-zero targets. He commended nations like Poland and Italy for investing in LNG import and storage infrastructure while dismissing the concept of a complete transition away from fossil fuels as energy addition rather than replacement.

To combat high domestic fuel prices, the administration is focusing on expanding domestic refining capacity and offering regulatory relief, moving away from past restrictions seen under figures like Gavin Newsom and Joe Biden. Utilizing measures such as the Defence Production Act is currently being examined to fast-track refinery funding and drive down consumer prices.