The United Arab Emirates is building a new strategic oil pipeline to bypass the Strait of Hormuz and plans to put it into operation by 2027. This move will allow the country to avoid the risks associated with transporting raw materials through one of the most dangerous waterways in the world.
As reports the Bloomberg news agency, the national oil company of Abu Dhabi will double its export capacity through the port of Fujairah, located on the coast of the Gulf of Oman, immediately after the project is completed. This will allow the Emirates to more consistently meet global energy demand, without being dependent on congestion or military threats in the strait.
Previously, the Persian Gulf states have already announced their intentions to build new pipelines to bypass the Strait of Hormuz due to the threat of long-term Iranian control over this route. The new highways are seen as the only way to reduce exporters’ chronic vulnerability to potential disruptions in the strait.
The UAE’s desire to deploy new production capacity has led to conflict with regional rival, the Kingdom of Saudi Arabia, at OPEC meetings. As a result, the United Arab Emirates announced its withdrawal from the organization.
Due to the high threat to shipping security in the region, the Emirates are currently exporting oil through the Strait of Hormuz in a covert mode.
The UAE and individual buyers have begun using tankers with tracking systems turned off amid the threat of ships being seized by Iranian forces. At the same time, the situation on the global market remains unstable, and oil supplies from Saudi Arabia to the world’s largest importer have fallen to a minimum. Saudi oil exports to China will show a large-scale drop in June, indicating a reorientation of energy flows.
The implementation of a new infrastructure project by the United Arab Emirates will significantly change the geopolitical map of energy routes in the Middle East. Creating an alternative logistical route will allow the country not only to protect its economic interests, but also to minimize the impact of regional conflicts on world oil prices.
The launch of the pipeline to the port of Fujairah will be an important step in ensuring the stability of the global energy sector in the face of a changing security situation.
