UAE fast-tracks new oil pipeline to sidestep Strait of Hormuz risks

Anticipating future shipping headaches in the Strait of Hormuz, the UAE is accelerating plans to build a new pipeline that can bypass the Iran-blocked waterway.

Crown Prince Sheikh Khaled bin Mohamed issued an order on Thursday to fast-track construction of the ADNOC pipeline aimed at expanding the UAE’s capacity to transport oil for export through the Gulf of Oman.

The national petroleum company’s existing Habshan-Fujairah pipeline already carries as much as 1.8 million barrels a day to the Indian Ocean coast, avoiding the narrow Hormuz channel, The Wall Street Journal reports. But that’s only about half the country’s prewar daily oil output.

Sheikh Khaled’s order comes a month after Saudi Arabia restored its East-West oil pipeline to full capacity, fixing damage linked to the Iran conflict that disrupted flows across the kingdom. Repairs to the pipeline, which runs from oil fields in Saudi Arabia’s Eastern Province to the Red Sea port of Yanbu, enabled the kingdom to service customers amid skyrocketing oil prices.

The new pipeline project, scheduled for completion in 2027, follows the UAE’s withdrawal from OPEC, which will allow it to increase production and meet the war-related rise in global demand for oil and gas.

Egypt offers to transport Saudi crude oil to Mediterranean port

Egypt said it could facilitate the transit of Saudi oil through its territory to ease export bottlenecks, positioning the Suez Canal and its pipeline infrastructure as alternatives to the Strait of Hormuz.

Petroleum Minister Karim Badawi said Tuesday that Egypt is prepared to transport Saudi crude from the Red Sea port of Yanbu to the Mediterranean via the Suez-Mediterranean Pipeline, known as Sumed.

The proposal comes after Reuters reported that Saudi Aramco told some buyers of its Arab Light crude that cargoes must be loaded at Yanbu on the Red Sea coast – a move sources say is intended to bypass the Strait of Hormuz following recent attacks on shipping.

The line runs across Egypt from the Gulf of Suez to the Mediterranean and has a capacity of about 2.5 million barrels a day, according to the U.S. Energy Information Administration.