A cargo ship docked at the Port of Fujairah, as the U.S.-Israel conflict with Iran limits marine traffic in the Strait of Hormuz, in Fujairah, United Arab Emirates, May 6, 2026. REUTERS\/Amr Alfiky<\/p>\n
UAE Will Double Oil Export Capacity Bypassing Hormuz by 2027<\/p>\n
May 15, 2026 (Bloomberg) \u2013The United Arab Emirates will double its capacity to export crude oil bypassing the Strait of Hormuz by next year, as it seeks to reduce reliance on the shipping chokepoint.<\/p>\n
Abu Dhabi National Oil Co. is accelerating the construction of a pipeline that runs to the port of Fujairah on the Gulf of Oman, according to a statement from the emirate\u2019s media office posted on X. The company already operates a 1.5 million barrel-a-day conduit from its oil fields to the port on its eastern coast, which has proved to be a lifeline during the Middle East conflict.<\/p>\n
UAE Port Ramps Up Hormuz-Dodging Oil Flows After Iranian Strikes<\/p>\n
The existing pipeline has helped the UAE continue to supply markets, offsetting the hit to oil revenue as Iran practically shut the normal route through Hormuz soon after the war began in late February. Adnoc had already been planning the pipeline expansion as the current link can carry less than half of its normal export volumes.<\/p>\n
\u201cThe project gains new significance in the context of the Hormuz crisis, but the logic behind it predates the war,\u201d said Carole Nakhle, chief executive officer of consultant Crystol Energy Ltd. \u201cThe core strategic objective is clear: reducing dependence on the Strait of Hormuz.\u201d<\/p>\n
Iran\u2019s closure of the strait, though which about a fifth of the world\u2019s daily supply of oil and gas normally flow, has thrown economies into turmoil and upended shipments of products like metals, fertilizer and plastics. The US has been imposing its own blockade for the past month aimed at halting shipments to or from Iranian ports.<\/p>\n
The UAE and Saudi Arabia are the only major Gulf producers able to get significant quantities of crude to market during the war. State oil companies of both countries have quietly managed to ship some cargoes out of the Gulf in recent weeks, avoiding the Iranian blockade.<\/p>\n
Aramco, Adnoc Sneak Oil Through Hormuz as Iran Menaces Strait<\/p>\n
Accelerating the pipeline\u2019s construction also follows the UAE\u2019s decision to exit the Organization of Petroleum Exporting Countries. Freed of the group\u2019s production limits, the UAE has said it will be<\/p>\n
more nimbly to market demands amid the disruption caused by the war. Additional export capacity through Fujairah will give the country more options even after Hormuz reopens to shipping.<\/p>\n
\u201cExpanding Fujairah export capacity fits naturally with Adnoc\u2019s production expansion plans,\u201d Nakhle said. \u201cThere is little point in expanding upstream production if export infrastructure becomes the bottleneck.\u201d<\/p>\n
With the UAE now out of OPEC, it will be looking to get its money\u2019s worth from major oil-field expansions. Adnoc is set to boost capacity to 5 million barrels a day by next year. When the company first began discussing that target in 2018, it could pump about 3 million barrels a day.<\/p>\n
Adnoc ships most of its main grade of crude \u2014 Murban, which is produced at its onshore fields \u2014 via the pipeline to Fujairah for export. The expanded capacity of the two pipelines will likely exceed the volume of Murban that Adnoc can produce. That means the company could use the new link to export its offshore grades from Fujairah. Crudes like Upper Zakum, produced at fields in the Gulf and exported from offshore terminals, are popular with refiners for their quality and often influence regional price levels.<\/p>\n
The UAE\u2019s not alone in having a Hormuz workaround. Aramco operates a pipeline running across Saudi Arabia to the Red Sea and is working to increase export capacity at its ports there. Neither route is a fail safe, with both Aramco\u2019s pipeline and the port of Fujairah facing attacks during the current conflict. Still, the biggest Gulf producers are creating options and looking to future alternatives.<\/p>\n
While the existing 252-mile (406-kilometer) pipeline to Fujairah hasn\u2019t itself been targeted in the war, infrastructure at both ends of the route has. Iranian drones hit a gas-processing facility near the pipeline\u2019s starting point at Habshan, while at the other end, the port of Fujairah has sustained damage that\u2019s temporarily disrupted shipments in multiple attacks during the conflict.<\/p>\n
How the Strait of Hormuz Has Become a Weapon of War<\/p>\n
\u00a9\u00a02026\u00a0Bloomberg L.P.<\/p>\n