DUBAI, Oct 20 (Reuters) – The investment in alternative logistics routes in the Persian Gulf to mitigate the impact of the war with Iran could render the Strait of Hormuz “obsolete” in the next five years, Georges Elhedery, chief executive of HSBC Group, said on Tuesday.
The conflict underscored the world’s heavy reliance on this strategic waterway, through which previously passed about a fifth of global trade in oil and liquefied natural gas.
This is forcing Gulf countries to direct resources toward the development of energy pipelines to the ports, investments that, according to Elhedery, will allow the region to overcome the consequences of the conflict.
“We believe this region will be able to recover and, then, continue growing. This will require a lot of investment,” said the bank’s chief executive during the HSBC Future Forum event in Dubai.
“Of course, we want and hope to see a resolution to the conflict… But the Strait of Hormuz, probably five years from now, could become obsolete,” he added.
The Middle East, North Africa and Turkey are offering US$872 billion in individual project packages, part of a broader portfolio of planned and not-yet-contracted infrastructure, valued at US$1.4 trillion, HSBC said in a report on Monday, citing MEED data, a Dubai-based market intelligence platform for the construction sector.
Meanwhile, a recent HSBC survey of more than 1,600 business leaders and about 820 global institutional investors revealed that they still consider the Persian Gulf an attractive investment hub.
However, after a 3.3% growth in 2025, the World Bank forecast last week a 1.3% economic contraction in the Middle East, North Africa and Pakistan region this year due to the war. This should be followed by a strong, but uneven, recovery in 2027.
Elhedery was among the global financiers who were expected to participate in Saudi Arabia’s main investment conference, which had been scheduled for next week, but was postponed to 2027 on Monday, after deadly attacks in Riyadh carried out by Yemen’s Houthi militants, supported by Iran.
