The Gulf in October 2026: What Organisations Need to Know
The Gulf security picture has shifted noticeably over the past week. Sea lanes, energy infrastructure and air travel are all under pressure at the same time. For organisations with people, assets or supply chains in the region, this is a time to prepare, not panic.
Shipping: Hormuz under sustained pressure
Eight commercial vessels have been struck by unknown projectiles in and around the Strait of Hormuz since 28 September, most recently a tanker that took engine-room damage on 4 October, (UKMTO 150-26) according to the UK Maritime Trade Operations centre. Crews have so far been reported safe, but war-risk insurance premiums for Gulf transits now run at several percent of hull value, compared with a fraction of a percent before the conflict. Several of the strikes took place close to Oman's coast, and ports outside the Strait, such as Fujairah, Sohar and Duqm, are busier as a result.
Saudi Arabia: A widening Houthi front
Saudi authorities have confirmed repeated Houthi missile and drone attacks on the south of the kingdom this month, mostly intercepted. Debris injured a resident in Asir and a projectile damaged a school in Najran. The Houthis also claimed a strike on an oil facility near Riyadh on 3 October; the coalition called the claim "misleading". Saudi-backed forces are striking Houthi positions in Yemen, and Reuters reports a ground offensive could follow within weeks.
US–Iran tensions remain
Tehran is still reviewing the US reply to its Hormuz proposal and says the strait stays closed until its conditions are met.
On 30 September, President Donald Trump said the Iran war would end “very soon”, without announcing an agreement. He had rejected Tehran’s proposal on 26 September which envisaged reopening Hormuz within seven days after conditions were met, rather than an unconditional seven-day truce. Disputed requirements include relief from military pressure, the US blockade and sanctions. Diplomacy nevertheless continued through separate, mediated contacts around the UN General Assembly. President Masoud Pezeshkian separately described a six-member decision making group representing the military, parliament and government, working with Supreme Leader Mojtaba Khamenei.
The IRGC Navy claimed it targeted 19 vessels during 25–27 September, without evidence. Subsequently, UKMTO reported four vessel strikes on 28–29 September. An unidentified projectile hit Kuwaiti tanker Al Funtas north of Khasab; the resulting fire was extinguished and its crew remained safe.
US Treasury Secretary Scott Bessent’s separate estimate of 15–22 million barrels daily uses an unclear measurement basis and should not be treated as directly comparable. Saudi September crude exports reached 5.28 million barrels daily and Aramco sold nearly 100 million barrels for October–November delivery through Hormuz. Separately, East-West pipeline throughput reportedly recovered to at least 3.5 million barrels daily, half its capacity, while Yanbu loadings resumed. Washington also sanctioned ten entities linked to Iranian weapons procurement, maintaining economic pressure alongside the diplomatic exchanges.
The principal negotiating obstacle is sequencing as Iran seeks relief before reopening, while Washington rejects Iranian control over international passage. Mediated exchanges create a channel for bargaining, but neither reciprocal commitments nor a verification mechanism has been announced. Consequently, diplomatic activity provides limited grounds for reducing operational risk. The reported recovery to 13.2 million barrels daily indicates improved throughput, rather than reliable access. Four vessel strikes on 28–29 September demonstrate that intermittent attacks can persist alongside higher volumes. Iran does not need to stop every vessel to affect trade as damage, evacuation and insurer restrictions can reduce available tonnage and delay sailings. Its unsupported claim of 19 attacks adds an intimidation campaign to the physical threat.
Baghdad seeks to bypass Hormuz risks via Türkiye, Syria and Jordan
On 25 September 2026, in his official address to the United Nations General Assembly (UNGA), Iraqi Prime Minister Ali al-Zaidi addressed the severe macroeconomic challenges his country is facing as a result of the conflict between the US and Iran. The closure of the Strait of Hormuz has severely disrupted Iraq’s maritime trade and constrained oil exports, which represent the country’s financial lifeline. In response to this crisis, Al-Zaidi suggested that increasing production over the coming years and diversifying export routes could boost government revenues.
This objective could be achieved both by strengthening existing export routes – notably the Iraq-Turkey Pipeline (ITP), including by increasing flows through the Turkish Mediterranean port of Ceyhan, which already handles Iraqi crude – and by developing new routes to Jordan, through a pipeline linking Iraq to the Red Sea port of Aqaba, and to Syria, through the proposed Iraq-Syria oil pipeline. Sources close to the Iraqi oil export project through Syria have recently revealed that the initiative will require around four years of work and a minimum investment of US$15 billion, given the need to build new infrastructure from scratch. Although the historic pipeline linking Iraq’s northern Kirkuk region to the Syrian port of Banias on the Mediterranean already exists, the line was severely damaged by conflicts in Iraq and Syria and has remained unused since the 1980s.
Despite the new route being largely set to follow the same path, the intact sections of the old pipeline are not compatible with modern technical specifications. The plan therefore calls for the development of an entirely new and integrated system capable of connecting both Iraq’s southern and northern oil fields to a central hub in Haditha, western Iraq, before continuing to Banias. The infrastructure will have an initial transport capacity of 2 million barrels of crude oil per day and has secured US backing, with support for the feasibility study from an international consortium that includes Chevron.
Iraq’s focus on Türkiye, Jordan, and Syria represents a profound reconfiguration of Middle Eastern energy routes, driven by the need to reduce dependence on strategic bottlenecks and shift towards underground pipelines that could potentially be less vulnerable to geopolitical blockages. Although these initiatives are being developed for commercial purposes and the Syrian oil pipeline enjoys Washington’s support, crucial risks to Iraqi governance remain to be taken into consideration, including the very strong political pressure exerted by domestic Shia factions loyal to Tehran. Additionally, laying pipelines across vast, isolated desert areas marked by latent conflicts not only raises concerns over organised criminal activity but also exposes the infrastructure to intermittent asymmetric attacks by militias opposed to the US-aligned axis.
Pro-Iranian armed factions, in the context of the recent withdrawal of the US-led coalition from Iraqi territory – a development that is fuelling serious concerns over their potential strengthening – represent the main vector of kinetic threat to these infrastructure developments.
Such initiatives require complex and rigorous environmental impact assessments to protect fragile desert ecosystems; at the same time, the involvement of Western consortia imposes an extremely stringent international compliance framework on legal departments. Economically, these developments do not simply constitute a long-term expansion plan, but respond to an immediate and unsustainable crisis in Baghdad’s financial flows, aggravated by the forced discounting of Basrah crude. As a result, the economic case for a US$15 billion investment in the pipeline to Banias becomes highly sustainable over the medium term, as it would eliminate the need to sell Iraq’s primary resource at heavily discounted prices. For businesses, the scheme offers billion-dollar contracts and opportunities for long-term foreign direct investment (FDI) for global engineering, procurement and construction (EPC) companies, despite the serious security challenges along the proposed route.
Aviation: Disruption and new questions on crew vetting
European regulators advise airlines to avoid parts of Saudi airspace near Yemen, and some carriers have suspended Gulf routes until later in the year. The attempted attack on flydubai flight FZ1073 on 30 September has also raised wider questions about how airlines and states screen flight crews.
Energy and supply chains
Oil prices remain volatile around $100 a barrel. G7 governments have agreed to release up to 100 million barrels of emergency diesel and crude, and Saudi exports via the Red Sea port of Yanbu have resumed. Businesses that rely on Gulf shipping should plan for longer lead times and higher costs.
Saudi pipeline restoration partially reduces this dependence, as the throughput of 3.5 million barrels daily restores substantial bypass capacity, but remains below the route’s seven-million-barrel design capacity. Yanbu also faces Houthi exposure. Accordingly, neither corridor currently provides a secure substitute for the other, and October–November sales commitments should not be confused with completed deliveries. Brent settled at $105.28 on 28 September and traded around $103.73 early on 30 September. That modest decline is consistent with improving supply expectations, while tight physical markets limit the inference of sustained normalisation.
Businesses should assess voyage feasibility against incident reporting, escort availability, insurance terms and discharge capacity. Contracts require provisions for delays, alternative ports and exceptional freight costs. Newly sanctioned procurement entities also warrant counterparty screening. Risk should be reduced only after sustained safe passage and demonstrable implementation of any negotiated commitments.
What this means for organisations
Most of the GCC remains open for business, and daily life in major cities continues largely as normal. But the risk is real and changing quickly. We recommend:
Reviewing travel approvals for southern Saudi Arabia, including Abha, Jazan, Khamis Mushait and Najran;
Briefing staff on air-raid alerts, shelter procedures and the risk from falling debris after interceptions;
Confirming war-risk cover and shipping schedules before critical cargo moves;
Keeping land-route and bypass-port alternatives under review;
Monitoring verified sources, not social media, where unconfirmed claims spread fast.
