DUBAI: Investment in alternative logistics routes in the Gulf to mitigate the impact of the Iran war could make the Strait of Hormuz “redundant” in the next five years, HSBC Group Chief Executive Georges Elhedery said on Tuesday.
The conflict has highlighted the world’s heavy reliance on the strategic waterway, through which a fifth of global oil and liquefied natural gas trade previously passed.
It is forcing Gulf nations to channel resources towards the development of energy pipelines to ports, investments that Elhedery said will allow the region to weather the fallout from the conflict.
“We do see this region being able to recover and then continue growing. It will mean a lot of investment,” the bank CEO said during the HSBC Future Forum event in Dubai.
“Of course, we do wish and hope to see a resolution to the conflict … But Hormuz, probably in five years’ time, may become redundant,” he added.
A recent HSBC survey of over 1,600 business leaders and around 820 global institutional investors, meanwhile, found that they still considered the Gulf an attractive investment hub.