(May 15): The United Arab Emirates (UAE) will double its capacity to export crude oil bypassing the Strait of Hormuz by next year, as it seeks to reduce reliance on the shipping chokepoint.
Abu Dhabi National Oil Co is accelerating the construction of a pipeline that runs to the port of Fujairah on the Gulf of Oman, according to a statement from the emirate’s media office posted on X. The company already operates a 1.5 million barrel-a-day pipeline from its oil fields to the port on the eastern coast, a link that has proven to be a lifeline for the country during the conflict.
The existing pipeline has helped the UAE continue to supply markets even as Iran practically shut the normal route through Hormuz soon after the war began at the end of February. The link, however, can carry less half of Adnoc’s normal export volumes, likely affecting the country’s oil revenue.
The UAE and Saudi Arabia are the only major Gulf producers able to get significant quantities of crude to market during the war. State oil companies of both countries have quietly managed to ship some cargoes out of the Gulf in recent weeks, avoiding the Iranian blockade.
Accelerating the pipeline’s construction also follows the UAE’s decision to exit the Organization of Petroleum Exporting Countries (Opec). Freed of the group’s production limits, the UAE has said it plans to increase output to meet a war-related boost in demand. Additional export capacity through Fujairah will give the country more options even after Hormuz reopens to shipping.
See also: Oil heads for weekly advance with Iran war resolution at impasse
While the existing 252-mile (406km) pipeline to Fujairah hasn’t been targeted in the war, infrastructure at both has. Iranian drones hit a gas-processing facility near the pipeline’s starting point at Habshan, while at the other end, the port of Fujairah has sustained damage which has temporarily disrupted shipments in multiple attacks during the conflict.
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