A Texas oil entrepreneur is advancing plans for a $5 billion oil refinery aimed at circumventing Iran’s blockade of the Strait of Hormuz, a strategic maritime chokepoint through which a significant portion of the world’s oil supply passes. Marc Gunderson, founder of MWG Enterprises, has partnered with two Middle Eastern investment funds to pursue the project, which seeks to mitigate Tehran’s control over Persian Gulf exports.
The proposed refinery, developed under the newly formed Mera Oil, a US-Saudi joint venture between MWG, Saudi Arabia’s AHQ, and the Patel Family Office, is intended to operate from one of three potential sites located in the Gulf of Oman. Preliminary reports suggest that the locations under consideration include Fujairah in the United Arab Emirates and Sohar in Oman—both members of the Gulf Cooperation Council (GCC), a regional alliance of six Arabian Peninsula states that coordinates on economic and political matters.
Unlike routes passing through the Strait of Hormuz, tankers navigating from the Gulf of Oman can avoid Iran’s most direct sphere of influence, reducing vulnerability to its blockade. Iran has effectively sealed off the strait since the commencement of US and Israeli airstrikes in February, leading to heightened volatility in global energy markets. Oil prices responded to escalating tensions, climbing 4 percent to $88 per barrel amid recent US and Saudi strikes on Iran-backed militias in Iraq, compounded by the interception of an Iranian missile allegedly targeting US forces.
The refinery is slated to have a capacity of approximately 200,000 barrels per day, a fraction of the roughly 11.5 million barrels exported daily by GCC countries in 2024. Beyond refining, the facility may function as a crude oil export hub for the broader GCC market, potentially serving Kuwait, Bahrain, and Qatar alongside Saudi Arabia and the UAE. This diversification of export routes aims to enhance energy security for Asian and European buyers reliant on Gulf oil supplies.
Gunderson emphasized that the project’s sponsorship structure and financial framework are established, with current efforts focused on selecting a host jurisdiction. “The jurisdiction that moves decisively with us in the coming months stands to secure a major new downstream, storage and energy-export platform,” he stated.
The refinery initiative emerges amid heightened regional instability. US military officials disclosed thwarting a planned Iranian assault on American forces hours before recent strikes, while Tehran confirmed firing on vessels in the Strait of Hormuz and on US bases in Jordan. Iranian authorities have rejected an Omani proposal for joint regional control of the strait, dimming prospects for a diplomatic solution to the ongoing blockade.
Analysts note that Iran’s determination to assert control over shipping lanes and the continued disruption of oil flows are driving market uncertainty. “Renewed military strikes in the Middle East and Iranian officials reiterating that they want to control shipping activity through the Strait of Hormuz amid depressed oil flows through the Strait are lifting oil prices again,” said Giovanni Staunovo, an analyst at USB.
As geopolitical tensions persist, efforts to develop alternative export infrastructure in the Gulf of Oman highlight the strategic imperative for Gulf states and international partners to secure stable energy routes beyond the Strait of Hormuz.