The Strait of Hormuz, a critical maritime passage that has historically carried approximately one-fifth of the world’s oil and liquefied natural gas trade, could face obsolescence within the next five years. This prediction comes from HSBC Group Chief Executive Georges Elhedery, who spoke at the HSBC Future Forum in Dubai on Tuesday.
Elhedery noted that the ongoing regional conflict has highlighted the global dependence on this strategic waterway, prompting Gulf nations to accelerate investments in alternative logistics routes. Specifically, these countries are prioritizing the construction of pipelines that link energy production sites directly to ports, a strategy intended to help the region withstand the economic fallout caused by the current instability. While Elhedery expressed a hope for a resolution to the conflict, he emphasized that the shift in infrastructure is likely to proceed, stating, "Hormuz, probably in five years’ time, may become redundant."
Despite the current climate of uncertainty, the region remains a significant focus for growth. Elhedery expressed confidence in the area's resilience, noting that the region is expected to recover and continue expanding, though this will require substantial investment. According to a report released by HSBC on Monday, which utilized data from the Dubai-based market intelligence platform MEED, the Middle East, North Africa, and Türkiye possess $872 billion in individual project packages, part of a broader $1.4 trillion pipeline of infrastructure projects that have not yet been awarded.
A recent survey conducted by HSBC involving over 1,600 business leaders and approximately 820 global institutional investors indicated that the Gulf remains an appealing destination for investment. However, the economic outlook remains mixed; the World Bank recently forecasted a 1.3 percent contraction for the Middle East, North Africa, and Pakistan region this year due to the war, following a 3.3 percent growth rate in 2025, with a projected rebound in 2027.
The regional instability has also impacted major events. Elhedery was among the global financiers planning to attend Saudi Arabia’s flagship investment conference; however, the event was postponed to 2027 on Monday following deadly strikes in Riyadh carried out by Yemen’s Iran-aligned Houthi militia.
