Saudi Arabia’s NEOM is seeking to position itself as a new logistics hub with the development of a new trade corridor connecting European and Gulf markets. The Port of NEOM, part of the $500 billion mega project, is intended to bypass the Strait of Hormuz to access global export markets and continue trade activity.

The strait – through which about a fifth of the world's oil normally passes – was effectively shut during the Iran war, but was declared “completely open” by Tehran on Friday. The Port of NEOM is a strategic gateway on the Red Sea, connecting the UAE, Kuwait and Iraq to markets in Europe through lorries and ships. Egypt, the Arab world’s most populous country, is also part of the corridor.

It forms part of OXAGON, an industrial city within the futuristic NEOM that the kingdom is developing as it focuses on diversifying its economy from oil. NEOM has invested more than 7.5 billion Saudi riyals ($2 billion) for development of the sustainable port.

The route is already actively used by importers from several European countries including Italy, the UK, Germany and Poland, NEOM said this week. Its importance was rising when the Strait of Hormuz remained closed to shipping traffic, leaving Gulf countries and Iraq looking for alternative routes for transporting general cargo and crude.

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