UAE Says Its Pipeline To Bypass The Strait Of Hormuz Is Almost Halfway Done

The UAE said the pipeline it’s building to bypass the Strait of Hormuz is almost halfway complete after accelerating construction while the key waterway remains closed as a result of the war in Iran.

Sultan Ahmed Al Jaber, CEO of Abu Dhabi National Oil Company, or ADNOC, announced the development in an interview with the Atlantic Council, saying “right now, too much of the world’s energy still moves through too few chokepoints.”

The pipeline will double the country’s export capacity through the Fujairah port, which is located on the Gulf of Oman beyond the Strait of Hormuz. It is expected to become operational next year.

Reuters detailed that the existing pipeline can carry up to 1.8 million barrels per day. The new maximum capacity would be above 3.5 million. The UAE is one of the two only countries with active pipelines allowing for substantial exports not involving tankers going through the Strait of Hormuz.

The Strait of Hormuz, located between Iran and Oman, connects the Persian Gulf to the Gulf of Oman and the Arabian Sea. The U.S. Energy Information Administration has described it as one of the world’s most important oil chokepoints, with few alternatives available if the route is disrupted.

Ever since the war in Iran began, the waterway has been blocked both by the U.S. and Iran, preventing energy from transiting and leading to a spike in energy prices. Few vessels have gone through since, and Iran said it wants to control it moving forward as a way to compensate damages sustained during the conflict.

In this context, a new report detailed that Tehran is consolidating its control over the Strait of Hormuz with island checkpoints, diplomatic arrangements, and, in some cases, reported transit “fees” to decide which vessels can pass through.

Reuters detailed that ships moving through the waterway are now being subjected to a multi-tiered clearance process by Iran’s Islamic Revolutionary Guard Corps, which can include affiliation checks, inspections, and diplomatic intervention.

The alleged fees have drawn direct warnings from Washington. The U.S. Treasury Department’s Office of Foreign Assets Control warned on May 1 that shippers risk sanctions if they make payments to Iran for passage through Hormuz, including through indirect methods such as barter, digital assets, or donations.