UAE fast-tracks second oil pipeline to bypass Strait of Hormuz
The United Arab Emirates is accelerating construction of a new pipeline designed to bypass the Strait of Hormuz, a move that would double its export capacity through the eastern port of Fujairah. Crown Prince Sheikh Khaled bin Mohamed bin Zayed announced the fast-tracking of the project at an executive meeting held by the Abu Dhabi National Oil Company (ADNOC), stating it would help "meet global demands," according to Al Jazeera.
The pipeline is expected to be operational by 2027, the government's Abu Dhabi Media Office said. It will complement the existing 380-kilometer Habshan-Fujairah pipeline, which already provides an alternative route for crude exports that avoids the strait. Saudi Arabia also operates a pipeline that can export crude without passing through the waterway, as reported by TASS.
The acceleration comes as Gulf nations grapple with the closure of the Strait of Hormuz, a chokepoint through which roughly a fifth of the world's oil typically flows. The blockade, linked to the US-Israeli war on Iran, has sent energy prices soaring globally, according to The Guardian. Iran's new maritime protocol in the strait, along with attacks on energy infrastructure, have forced Gulf states to seek alternative export routes, Al Jazeera reported.
The UAE's decision to fast-track the pipeline follows its withdrawal from OPEC after 60 years of membership, a move that Al Jazeera notes in its coverage. The country's state oil company, ADNOC, said it is "well positioned as a responsible and reliable global energy producer, with the operational flexibility to responsibly increase production to meet market needs when export constraints allow," as quoted by Al Jazeera.
Japan secures alternative supplies
Amid the disruption, Japan has reached an agreement with the UAE for additional oil supplies, with shipments to be loaded at the port of Fujairah on the Gulf of Oman, TASS reported. Japan's Minister of Economy, Trade and Industry, Ryosei Akazawa, said the UAE and Saudi Arabia have pledged to ensure stable oil supplies using new approaches, citing the two countries' alternative export routes.
The port of Fujairah has previously been targeted by Iranian drone strikes, TASS noted, underscoring the risks that remain even for facilities outside the strait.
War's toll on UAE energy infrastructure
The UAE's main gas-processing complex, Habshan, has been hit by the fallout of the war, according to The Hindu. The facility, one of the world's largest, was targeted in attacks, with production halted at least three times due to fires caused by falling debris from intercepted projectiles. Iran launched drone and missile attacks on the UAE more than any other country during the conflict, the report said.
ADNOC Gas, which operates the complex, reported a 15% drop in net income for the first quarter, attributing the decline to "increased regional uncertainty" and disruptions caused by the blockade. The company expects the closure of the strait to cost it between $400 million and $600 million in the second quarter. It also said the Habshan site will not return to full capacity until next year, with production currently at 80% and full restoration expected in 2027, according to The Hindu.
Key claims
- The UAE is fast-tracking a new pipeline to bypass the Strait of Hormuz, expected to double export capacity via Fujairah by 2027 (Al Jazeera).
- The UAE has left OPEC after 60 years, as reported by Al Jazeera.
- Japan has secured additional oil supplies from the UAE, with the port of Fujairah as the loading point, according to TASS.
- Iran has previously targeted the Fujairah port area with drone strikes, a claim carried by TASS.
- ADNOC Gas expects the blockade to cost it between $400 million and $600 million in the second quarter, and its Habshan gas-processing complex will not return to full capacity until next year, The Hindu reported. The complex was hit by falling debris from intercepted Iranian attacks, causing fires and halting production at least three times.