UAE weighs third pipeline to route crude past Hormuz

The United Arab Emirates is considering a third oil-export pipeline that would deliver crude outside the Strait of Hormuz, according to people familiar with the matter, as the country aims to sharply reduce its dependence on the waterway.

Abu Dhabi National Oil Co. is weighing building the pipeline to run from the UAE’s western coast to the port of Fujairah in the east, the people said, asking not to be identified discussing private matters. The pipeline could be open for use by third parties and would add to an existing link and another conduit scheduled to start next year, they said, bolstering the ability to supply customers in case of future disruptions at Hormuz.

Adnoc has been telling some customers in Asia about the pipeline, other people familiar with the matter said. The plans haven’t been finalized and could still change, including the route, a number of the people said.

“We have advised Bloomberg that this report is not accurate and purely speculative,” a spokesperson for Adnoc said.

Pipeline workarounds in the UAE and Saudi Arabia have been key in keeping oil flowing to world markets as voyages through the crucial waterway during the Iran war remain highly risky. New links and higher port capacity on its eastern coast are a central part of Abu Dhabi’s multibillion-dollar plan to move its economy toward zero reliance on the waterway.

Adnoc currently operates a pipeline connecting its onshore fields in western UAE to Fujairah, with the capacity to move about 2 million barrels a day. The company said in May it was accelerating construction of a second line aimed at completion by next year, which would double transportation capacity. It has indicated to some Asian refiners that they would be able to collect supply delivered to Fujairah through that link in early 2027, people familiar with the matter said last month.

The UAE, which left the Organization of the Petroleum Exporting Countries in May, plans significant investment in new pipelines, rail and road networks, and a major expansion of at least three eastern ports as part of a push to end its dependence on Hormuz, Minister of Foreign Trade Thani Al Zeyoudi said earlier this year.

The waterway that connects the Persian Gulf’s biggest oil producers to markets worldwide was all-but closed during the height of the Iran war, and ships have continued to be frequently targeted even though more are now sailing through.

The UAE has been one of the most successful in pushing oil out through the chokepoint. Saudi Arabia and Kuwait have also sent out their crude as they compete for buyers to make up for billions of dollars of missed sales during the conflict. Saudi Arabia, whose Hormuz-avoiding East-West pipeline was the main means of getting its crude to customers during the conflict, has said it is planning to increase the capacity of the link and is considering other conduits. Kuwait, which is entirely dependent on Hormuz, is in talks with both Saudi Arabia and the UAE for pipeline alternatives, Sheikh Nawaf Al-Sabah, chief executive officer of its state-run oil company, said.

However, Hormuz bypass pipelines haven’t fully insulated countries’ exports from security risks. The port of Fujairah has been attacked several times during the Iran war, while Saudi Arabia’s East-West link halted temporarily after an attack in September.