Full Breakdown
UAE and Saudi Gulf States Accelerate Infrastructure to Bypass the Strait of Hormuz
7/16/2026, 12:54:40 AM
Core Initiative: New Pipelines and a Fujairah Port
Oil-producing states in the Persian Gulf are advancing parallel projects to reduce reliance on the Strait of Hormuz, which has been repeatedly disrupted by Iranian attacks since the war entered its fifth month. The United Arab Emirates (UAE) is fast-tracking a new multipurpose port and container terminal in Fujairah on the Gulf of Oman, while Saudi Arabia is expanding its East-West crude pipeline network and supporting a 2.5-million-barrel-per-day pipeline from Basra to Haditha.
Background & Context
The Strait of Hormuz carries roughly one-fifth of global oil shipments. Iranian missile and drone strikes, coupled with a U.S.–Iran confrontation, have caused cargo volumes at Dubai’s Jebel Ali port to fall 90-95 %. The disruption prompted Gulf governments to treat the waterway’s closure as a recurring risk rather than a one-off shock.
Key Figures & Groups
- Sultan Al Jaber, chairman of Abu Dhabi National Oil Company (ADNOC) – champion of the UAE’s West-East pipeline.
- Sheikh Khaled bin Mohamed bin Zayed, Crown Prince of Abu Dhabi – ordered acceleration of the West-East pipeline to 2027.
- Ahmed bin Sulayem, chief executive of the Dubai Multi Commodities Centre – senior UAE official on the Fujairah port plan.
- Mohammed Shia al-Sudani, Prime Minister of Saudi Arabia – praised the Basra-Haditha pipeline.
- Andy Lipow, president of Lipow Oil Associates – provides data on Saudi pipeline flows.
Data & Statistics
- The Strait of Hormuz handles about 20 % of world oil.
- Goldman Sachs projects that pipeline capacity could divert up to 45 % of pre-war Gulf oil exports by the end of 2027 and reach 7.3 million barrels per day (bpd) by the end of 2028, representing roughly 60 % of Gulf output.
- The UAE’s West-East pipeline, 252 mi long, is slated to double overland capacity to 3.6 million bpd once completed.
- Saudi Arabia’s East-West network (Petroline) has a design capacity of 7 million bpd; about 4 million bpd are currently diverted to Red Sea ports.
- The Basra-Haditha pipeline is designed for 2.5 million bpd, with $1.5 billion allocated for construction.
Why It Matters
By creating “strait-proof” export routes, the Gulf states aim to blunt Iran’s leverage, stabilize global oil prices, and safeguard trade flows for regional economies that lack alternative sea access, such as Kuwait, Bahrain and Qatar. The projects also signal a shift toward diversified logistics networks that can operate despite future maritime chokepoint closures.
Official Statements & Responses
UAE officials describe the Fujairah development as “defensive in case things go wrong” and emphasize that it will serve as a backup rather than replace Jebel Ali. Saudi authorities have announced preliminary talks to expand their Red Sea pipeline capacity to 9 million bpd, seeking broader regional cooperation. The International Energy Agency notes that 93 % of Qatar’s LNG still transits the strait, underscoring the continued regional dependence.
Criticism & Opposition
Analysts caution that even with the planned infrastructure, 7-9 million bpd of oil and refined products will remain tied to the strait, and the new pipelines depend on stability in the Red Sea, where Iran-backed Houthi attacks threaten the Bab el-Mandeb. Saudi and Emirati planners also face logistical challenges linking Fujairah’s facilities to inland markets, potentially raising transport costs.
On-the-Ground Reports
Satellite imagery shows extensive congestion at Fujairah’s existing harbor following the Jebel Ali traffic collapse. Iranian missile debris set fire to Jebel Ali in March, and subsequent attacks have damaged multiple Emirati tankers, prompting the rapid diversification effort.
Conflicting Reports & Gaps
Estimates of bypass capacity differ: Goldman Sachs cites 45 % diversion by 2027, while UAE officials project 60 % “strait-proof” capacity by 2028. The timeline for completing the Basra-Haditha pipeline remains undefined, and no firm completion date has been set for Saudi’s proposed Red Sea expansion.
Verbatim Quotes
- “Right now, too much of the world’s energy still moves through too few choke points. That is exactly why the UAE made the decision more than a decade ago to invest in infrastructure that bypasses the Strait of Hormuz,” — Sultan Al Jaber, Chairman, ADNOC
- “Long-term solutions include rerouting energy pipelines westward, across Saudi Arabia to the Red Sea and Mediterranean, bypassing Iran's geographic choke point,” — Benjamin Netanyahu, Prime Minister of Israel
- “Jebel Ali will continue to be Jebel Ali,” — Senior company official, Financial Times interview
- “As regional demand grows, we are scaling our capabilities to provide customers with an integrated network they can depend on at every stage,” — Ahmad Yousef Al-Hassan, CEO, DP World GCC
What’s Next
DP World expects the Fujairah facilities to be operational in roughly 18 months. The UAE aims to double its crude export capacity through Fujairah by 2027, while Saudi Arabia’s pipeline expansion talks are ongoing, with no public deadline announced.
