This may be a really dumb question but with all the money the UAE seems to have (Dubai), would it be feasible or even beneficial to build their own “Panama Canal” from say Dubai straight east to the Gulf of Oman just bypassing the Straight of Hormuz altogether?
We could sign over control of the Straight to Iran and then just negotiate with UAE to use the canal.
I think it would be a lot cheaper to build several pipelines instead.
For one reason, if you are talking about a canal crossing the peninsula which separates the Persian Gulf from the Gulf of Oman, much of the eastern part of that peninsula is mountainous, which would make the engineering challenge, and the cost, much higher.
ETA: I type too much too slowly.
There’s a ridge of mountains along the peninsular axis. Gonna be expensive to cut a channel through them. Probably not engineering impossible, but perhaps financially impossible. Remember: the measure of merit is not “Does UAE have the cash to build this as a boondoggle?” It’s “Can UAE build and operate this thing at a profit, recouping the cost of construction over a reasonable timespan?”
Second issue is that Iran’s missiles can reach a lot more than just the narrowest point of the Strait of Hormuz. Wherever UAE might put their new canal mouths at either end, there will be a pile of ships sitting around in the nearby gulfs of Oman & Persia waiting to use the canal. All of which are well within Iranian missile range.
So a couple decades of digging for what benefit?
One issue I could see is that oil is not the only thing being transported via the Strait of Hormuz. Fertilizer, LNG, clothing, manufactured goods and food are also transported through it.
Perhaps we could resurrect Project Plowshare.
Well, trying to do so wouldn’t make them the first Arabian country to decide digging a giant line would be a fantastic way to squander money. The Line, Saudi Arabia - Wikipedia, or for those who prefer a visual,
But pretty much this. The Persian Gulf isn’t very wide, and Iran has already demonstrated that it can hit targets well inside Saudi Arabia and the UAE with drones. The East–West Crude Oil Pipeline in Saudi Arabia was built in the 1980s because of the Tanker War during the war between Iran and Iraq, but there are two problems with it: it’s already been shut down once by a Houthi drone attack in 2019, and all it does is divert oil into the Red Sea - where Yemen can blockade it.
Which is why there has been talk of extending the pipeline to the Mediterranean - either through Lebanon, or Israel, or both.
UAE has the Habshan–Fujairah oil pipeline that goes through the mountains and bypasses the Strait of Hormuz.
It can transport 1.5M barrels per day (potentially up to 1.8M) while the UAE produces 3.3M - 4M bpd.
It took 3 years to build and cost $3-4B which seems pretty cheap for the value.
This is a good point that I didn’t grok the first time I read it, but not everything can be pushed through a pipeline.
Depends on how high you set the pressure. Anything blends given enough pressure. 
Serious answer: the only stuff that matters to the world that passes through Hormuz is crude oil & LNG. Everything else could be sent overland by truck and would inconvenience the hell out of e.g. Kuwait, but would matter practically zero to the rest of the planet’s economy.
Exactly. The stuff other than crude oil & LNG is only manufactured where it is because it’s conveniently close to the sources of crude oil & LNG. If it is no longer convenient to manufacture there, it could all be manufactured elsewhere if you can get the crude oil & LNG out.
As a rule, when people have to send stuff via your location, it is not an inconvenience it is a goldmine. OK it might be an inconvenience if you actually have to live on the relevant roads, but overall the economic opportunities from the passing trade make up for it.