UAE fast-tracks new oil route as Strait of Hormuz closure hits global supplies

• West-East Pipeline to double oil export capacity via Fujairah.
• New pipeline expected to be operational by 2027.
• Strait of Hormuz’s effective closure has boosted energy prices.

The United Arab Emirates will accelerate construction of a new oil pipeline to double its export capacity through Fujairah by 2027, the government’s Abu Dhabi Media Office said on Friday, vastly expanding its ability to bypass the Strait of Hormuz.

Abu Dhabi Crown Prince Sheikh Khaled bin Mohamed bin Zayed directed the Abu Dhabi National Oil Company (ADNOC) to fast-track the West-East Pipeline project during an executive committee meeting, ADMO said, adding the pipeline is under construction and expected to start operating in 2027.

It did not disclose the original timeline for the project.

The UAE’s existing Abu Dhabi Crude Oil Pipeline (ADCOP), also known as the Habshan-Fujairah pipeline, can carry up to 1.8 million barrels per day, and has proved crucial as the country seeks to maximise direct exports from the Gulf of Oman coast.

The UAE and Saudi Arabia are the only Gulf producers with pipelines that export crude outside the Strait of Hormuz, while Oman has a long coastline on the Gulf of Oman.

The narrow waterway between Iran and Oman was effectively shuttered by Iran in response to a US-Israeli air and naval campaign that began on February 28, choking off about a fifth of global oil supplies that normally flow to Asia and elsewhere.

Kuwait, Iraq, Qatar and Bahrain are almost wholly reliant on the strait for shipments.

Energy prices have surged due to the disruption to supplies, prompting governments to ration fuel and raising fears of an economic downturn as inflation builds.