UAE to accelerate oil pipeline project to help bypass Hormuz amid Iran war fallout
 
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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.
 
Iran has effectively shut the Strait of Hormuz since the country was attacked by the US and Israel on February 28, choking off about a fifth of global oil supplies. Energy prices have surged due to the disruption, prompting fuel rationing in some countries and fears of an economic downturn as inflation builds.
 
ADMO 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 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. Oman has a long coastline on the Gulf of Oman, while Kuwait, Iraq, Qatar and Bahrain are almost wholly reliant on the strait for shipments.
 
The new UAE pipeline is not to be confused with Saudi Arabia’s East-West pipeline, which state oil giant Aramco’s Chief Executive Amin Nasser has called a “critical lifeline.”
 
Aramco ramped up the pipeline’s capacity to 7 million bpd in eight days, he said, keeping about 60% of the kingdom’s pre-war exports flowing.
 
The announcement of the new pipeline comes two weeks after the UAE exited the Organization of the Petroleum Exporting Countries, which is de facto led by Saudi Arabia — freeing it of oil output quotas.
 
The UAE could boost output capacity to 6 million bpd if necessary, its energy minister told Reuters last year. ADNOC is targeting 5 million bpd of capacity by next year, a goal brought forward by three years. It said in May 2024 that capacity had reached 4.85 million bpd and has not provided an update since.
 
ADNOC Drilling, one of the group’s six listed subsidiaries, is ready to deliver whatever capacity expansion ADNOC needs, its finance chief told Reuters this week.
 
The UAE produced just under 3.4 million bpd in January before the war, but output more than halved after the effective closure of the Strait of Hormuz forced ADNOC to shut in some production, Reuters reported in March.
 
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