How Iran’s Oil Infrastructure Gambit Could Imperil the Strait of Hormuz

War on the Rocks – On June 25, Iran’s President Hassan Rouhani announced a possible game-changer — that by March 2021, his country would upgrade its energy infrastructure to bypass entirely the Strait of Hormuz when it exports its oil. These upgrades would include a new pipeline and port facilities in the southern coast bordering the Gulf of Oman. And the recently announced comprehensive between Iran and China, a 25-year agreement that would cover energy, infrastructure, and military cooperation among other things, appears to stipulate the development of parts of this plan with support from Beijing. The deal also provides for the development of a new port that would rest comfortably in Chinese control. Rouhani’s ambitious new plan would allow Iran to close the Strait of Hormuz without losing its ability to export oil and forfeiting corresponding revenues. It would also allow Iran to sustain energy supplies to China, thus avoiding the political backlash that might come from taking more offensive actions in the Strait of Hormuz. Through this action, which seems to have been missed by many in the United States, Iran may be signaling its calculus is changing.