The United Arab Emirates (UAE) has set an ambitious goal to complete a new oil pipeline that will bypass the Strait of Hormuz by next year, aiming to safeguard its future crude exports from potential disruptions. This strategic move comes in response to the ongoing blockade of the critical maritime passageway, which has been in place for nearly 11 weeks. The blockade has significantly impacted global energy prices and strained Gulf economies, as the Strait previously facilitated the transport of 20% of the world’s oil and seaborne gas prior to the conflict with Iran.
Abu Dhabi’s Crown Prince, Sheikh Khaled bin Mohamed bin Zayed Al Nahyan, has instructed the UAE state oil company to expedite the construction of this previously unannounced pipeline. The goal is to enable oil transportation from the Emirates to the port of Fujairah by 2027. This new infrastructure is anticipated to significantly enhance the UAE’s export capacity, effectively doubling the output of the existing Habshan-Fujairah pipeline, which currently manages up to 1.8 million barrels a day to the Gulf of Oman port.
The Habshan-Fujairah pipeline has been vital for the UAE in maintaining its oil exports following Iran’s blockade of tankers through the Strait of Hormuz. This blockade was imposed shortly after the US and Israel launched attacks on February 28. Currently, the UAE and Saudi Arabia are the only Gulf countries capable of exporting crude via pipelines that circumvent this narrow waterway, which runs between Iranian and Omani territories.
The decision to accelerate the development of a second pipeline follows the UAE’s recent departure from the Organization of the Petroleum Exporting Countries (OPEC) after six decades of membership, highlighting a growing rift with Saudi Arabia, OPEC’s de facto leader. Exiting the oil cartel is seen as a strategic move by the UAE, the third-largest oil producer in the group, to potentially increase its oil output beyond future OPEC production limits once the conflict concludes and normal passage through the Strait resumes.
While the exact capacity of this new pipeline has not been disclosed, if it doubles the current capacity to 3.6 million barrels a day, it would position the UAE’s pipeline exports closer to that of Saudi Arabia. Saudi Arabia currently transports approximately 7 million barrels a day from its eastern oilfields to the Red Sea port of Yanbu, with 5 million barrels being exported. This new pipeline would allow the UAE to bolster its oil export strategy, regardless of the conflict’s duration or the terms of any peace deal that may not fully restore tanker flow through the Strait of Hormuz to pre-crisis levels.