Iraq Launches $24B Trade Corridor Amid Hormuz Crisis

The Strait of Hormuz crisis has accelerated efforts to develop alternative trade routes, with Iraq's $24 billion "Development Road" project emerging as a key initiative. The route, connecting Iraq’s Grand Faw Port to Turkey and Europe, is advancing "with discipline," according to Middle East Council on Global Affairs analyst Muhanad Seloom. The project aims to reduce reliance on Iranian-controlled waters, as Tehran’s actions have effectively closed the Hormuz shipping lane. Iraq’s Prime Minister Mohammed Shia al-Sudani inaugurated the first 63-kilometer stretch in 2025, with Phase 1 expected to be completed by 2028. Meanwhile, the Trump administration has warned Iran against further escalation, signaling U.S. readiness to ensure the strait remains open. Iranian forces have laid mines and threatened commercial traffic, leading to a 95% reduction in shipping through the waterway. The UAE’s foreign minister described Iran’s actions as an attempt to disrupt the global economy. Analysts note that the Development Road project could significantly reduce Tehran’s leverage over Iraq by diverting trade away from Iranian waters. Additionally, Saudi Arabia’s East-West Petroline pipeline is also being advanced as part of broader regional infrastructure shifts.