The United Arab Emirates (UAE) announced plans to accelerate construction of a new oil pipeline that will double its export capacity through Fujairah by 2027, according to Reuters and The Guardian. The move is aimed at securing future crude exports amid ongoing tensions in the region.
Key Takeaways
The UAE announced plans to accelerate construction of an oil pipeline bypassing the Strait of Hormuz by 2027, doubling its export capacity through Fujairah. This move comes amid ongoing tensions in the region and disrupted global energy supplies.
- UAE aims to double oil export capacity via a new pipeline by 2027
- Current blockade of the Strait of Hormuz has lasted nearly 11 weeks
- Pipeline project is part of broader strategy to secure future crude exports
- UAE's departure from OPEC highlights growing tensions with Saudi Arabia
Abu Dhabi Crown Prince Sheikh Khaled bin Mohamed bin Zayed Al Nahyan directed the Abu Dhabi National Oil Company (ADNOC) to fast-track the West-East Pipeline project. This pipeline, expected to start operating in 2027, will significantly expand the UAE's ability to bypass the Strait of Hormuz.
The existing Habshan-Fujairah pipeline can carry up to 1.8 million barrels per day and has been crucial for the UAE's oil exports since Iran blocked tankers passing through the strait following U.S.-Israeli attacks on February 28, as reported by Reuters and The Guardian. The new pipeline will double this capacity.
The decision to fast-track the project comes as global energy supplies remain under pressure. The blockade of the Strait of Hormuz has disrupted about a fifth of global oil supplies, prompting governments to ration fuel and raising fears of an economic downturn due to inflation, according to Reuters.
The UAE's departure from OPEC earlier this month highlights growing tensions with Saudi Arabia. The UAE has been investing heavily via ADNOC to increase its production capacity, aiming to produce 4.9 million barrels per day (BPD). Currently, due to the war, the UAE is producing between 1.8 and 2.1 million BPD.
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