Key facts
- The UAE is constructing a new oil pipeline to bypass the Strait of Hormuz, expected to be completed by 2027.
- The project aims to secure crude oil and LNG exports amidst ongoing conflict and attacks on shipping.
- The new pipeline is projected to double the UAE's export capacity via the Habshan-Fujairah route.
- Adnoc reported strong Q2 2026 earnings of $665 million.
- The UAE recently exited OPEC, seeking greater flexibility in production and investment.
The United Arab Emirates is accelerating the construction of a new oil pipeline designed to bypass the Strait of Hormuz, a critical chokepoint for global energy exports. The project, expected to be completed by 2027, aims to secure the UAE's crude exports against disruptions stemming from the ongoing conflict involving Iran, Israel, and the United States.
Abu Dhabi National Oil Co (Adnoc) announced plans to construct a liquefied natural gas (LNG) export facility on the eastern coast, allowing shipments without crossing the Strait of Hormuz. This move comes after Adnoc's vessels faced repeated drone and missile attacks in the waterway. The company also reported strong second-quarter 2026 earnings of $665 million.
Sheikh Khaled bin Mohamed bin Zayed Al Nahyan has directed Adnoc to fast-track the pipeline, which is expected to double the UAE's export capacity via the Habshan-Fujairah pipeline to 3.6 million barrels per day. This expansion would bring the UAE's pipeline exports closer to Saudi Arabia's capacity. The decision to expedite the project follows the UAE's recent departure from OPEC, a move that grants the nation greater flexibility in production decisions.
Sultan Ahmed Al Jaber, CEO of Adnoc, stated that the new west-east pipeline is already nearly 50 percent complete. He emphasized the vulnerability of global energy systems reliant on narrow maritime chokepoints, highlighting the need for infrastructure redundancy. The International Energy Agency has warned that oil markets could enter a 'red zone' due to ongoing disruptions, with over 14 million barrels per day removed from global markets. Concurrently, Iran has established the Arabian Gulf Strait Authority to oversee transit through the Strait of Hormuz.