The United Arab Emirates is set to enhance its oil export security by completing a new pipeline bypassing the Strait of Hormuz, with the project expected to be finished by next year. This strategic move comes amid the ongoing blockade of the crucial maritime route, which has lasted for nearly 11 weeks, significantly impacting global energy prices and putting pressure on Gulf economies. The strait was a conduit for 20% of the world’s oil and maritime gas before the Iran conflict escalated.
Abu Dhabi’s Crown Prince, Sheikh Khaled bin Mohamed bin Zayed Al Nahyan, has instructed the UAE’s state oil company to expedite this previously unannounced project. The goal is to have the pipeline operational by 2027, facilitating the transport of oil from the emirates to the port of Fujairah. This new infrastructure is anticipated to double the UAE’s export capacity via the current Habshan-Fujairah pipeline, which currently handles up to 1.8 million barrels of oil per day to the Gulf of Oman.
The significance of the existing pipeline has grown since Iran began obstructing tanker passage through the Strait of Hormuz following the US and Israeli strikes on February 28. At present, the UAE and Saudi Arabia are the only Gulf nations capable of exporting crude through pipelines that circumvent this narrow passage running between Iranian and Omani territories.
The UAE’s decision to accelerate the pipeline project closely follows its exit from OPEC, ending a 60-year membership and signaling a potential rift with Saudi Arabia, the organization’s de facto leader. This departure is seen as a strategic move allowing the UAE, OPEC’s third-largest oil producer, greater flexibility to increase oil production beyond the consortium’s future quotas once the conflict ceases and trade through the strait normalizes.
While the capacity of the new pipeline hasn’t been publicly detailed, the goal to potentially double its current output to 3.6 million barrels daily would enable the UAE to significantly boost its export capacity. This would bring its capabilities closer to that of Saudi Arabia, which transports around 7 million barrels a day from its eastern oilfields to the Red Sea port of Yanbu, with 5 million barrels earmarked for export. This expansion could allow the UAE to enhance its oil exports even if the conflict prolongs or if tanker flow through the strait remains restricted.