The long and short of a post-conflict Arabian Gulf

There used to be – maybe there still is – a podcast in which contributors were asked to go “long” and “short” in their predictions on future outcomes. Long in financial parlance means confidence that a share price will go up; short that it will go down.

What can we predict about a post-conflict Arabian Gulf? Where are the longs and shorts? First, we should go long on railways for both passengers and freight, and other land-based transport like pipelines.

Certainly, as pre-war modes reassert themselves, as it will at some point, cost will dictate that the ships and tankers will come back. Qatar, for one, has 200 LNG carriers. It is not going to let them go to waste.

But the gas-rich emirate and others will seek insurance in the form of pipelines to take gas to ports away from the Strait of Hormuz. Doha already operates the Dolphin line that sends gas to the UAE and Oman but it can, and should, extend to include an export option. Duqm in Oman is often mentioned.

Elsewhere, our columnist Robin Mills wrote last week that “a few, relatively short” pipeline connections can link Kuwait, Qatar and Bahrain and even Iraq. Building those lines is not a panacea but it does give flexibility and – new word alert – redundancy.

Robin also highlighted the region’s dependence – Qatar aside – on associated gas and pointed in particular to Kuwait which suffers from persistent brownouts due to underinvestment. There are interconnections via the grid but Kuwait has not exploited its abundant solar potential. Surely that will now change. Long.

That is not to say that hydrocarbons are on the way out. It is to say that in the search for energy security, alternatives become more attractive. All those green hydrogen plots in Oman suddenly look more appealing.

Further reading:

• Saudi Arabia expands shipping services via Red Sea
• Iraq turns to Syria, Jordan and Turkey to revive oil exports
• Fujairah’s importance grows with each day Hormuz remains closed

And then there are the railways. As recently as January our columnist Liz Bains inveighed caustically – but probably accurately – on the signing of a deal to develop a high-speed rail link between Riyadh and Doha. Liz was sceptical that the project would see the light of day, having heard these announcements before. Now, having been short, we can go long.

In Saudi Arabia, it is now a safer bet that the Land Bridge, a 950km line linking Riyadh with the kingdom’s west coast, will go ahead. True, the project has been on the drawing board for at least 30 years and the subject of scrutiny on the part of AGBI and others about its status – was a final investment decision ever taken? – but the imperatives to move freight and possibly refined oil products by land now assert themselves. Long.

Long, too, on GCC cohesion. Qatar, Bahrain and Kuwait need alternatives to the Strait of Hormuz. Iraq can access the Mediterranean via the Ceyhan pipeline but the route is vexed. The six GCC states and friendly neighbours need each other.

Any shorts? It may be premature but we should be realistic about food security. There is an atavistic longing to become less dependent on imports of food and that longing may have become more keen in this conflict.

The genesis of the region’s interest in Africa came about because of perceived vulnerabilities to food shortages and as part of a search for dedicated farmland. Much hope has been invested in vertical farming but it has disappointed. The current conflict may well provide an impetus towards more of the same. But the GCC states will still need to import a lot of food. Short.