After the UAE's withdrawal, construction of the "energy lifeline" is underway! The new oil pipeline bypassing the Strait of Hormuz is almost 50% complete.

The CEO of Abu Dhabi National Oil Company (ADNOC) Sultan Ahmed Jaber announced on Wednesday that the UAE has completed nearly 50% of the construction of the second oil pipeline bypassing the Strait of Hormuz. Currently, ADNOC operates a 252-mile (about 406 kilometers) pipeline with a daily oil transmission capacity of 1.5 million barrels. This pipeline has become the "energy lifeline" of the UAE during the past few months when shipping in the Strait of Hormuz was obstructed due to the Middle East situation. However, the pipeline's capacity is still less than half of the UAE's normal export volume, severely limiting the country's oil revenue. At the same time, ADNOC is accelerating the construction of a new oil pipeline from inland oil fields to the Fujeirah port on the east coast. The port of Fujeirah is located in the Gulf of Oman and is not affected by the conditions in the Strait of Hormuz. Due to the conflict in the Middle East, the UAE has expedited the construction of this project. The pipeline is expected to start operating in 2027. This new pipeline will double ADNOC's export capacity through the Fujeirah port, allowing the UAE to increase its total export capacity through the bypass of the Strait of Hormuz to 3 million barrels per day. Jaber stated in an interview, "Currently, too much energy is still being transported through too few critical chokepoints globally." He pointed out that the blockade of the Strait of Hormuz has caused the "most significant energy supply disruption in history." The closure of the Strait of Hormuz has already resulted in a loss of over 1 billion barrels of oil supply, and for each additional week of closure, nearly 100 million barrels of oil supply are lost. Jaber mentioned that even if the conflict ends immediately, it will take at least four months to restore oil transportation to 80% of normal levels; to fully recover, it will take until the first or second quarter of 2027. Jaber stated, "This is not just an economic issue. In fact, once you accept that a country can use the most critical global waterway as leverage, it sets a dangerous precedent." U.S. Energy Secretary Wright stated last Friday that after the Middle East conflict, with Gulf countries constructing more pipelines bypassing the Strait of Hormuz, the importance of the Strait of Hormuz to the global energy market will decline. Wright said, "This card can only be played once. The future of energy will have other routes out of the Persian Gulf." "We will see a decrease in the importance of the Strait of Hormuz, but we will not see a decrease in the importance of these countries' energy production and supply." The expansion of this new pipeline is closely related to the UAE's decision to withdraw from the Organization of the Petroleum Exporting Countries (OPEC). After freeing itself from OPEC production restrictions, the UAE has explicitly stated that it will increase production to capture the demand increment brought on by the war. Even if the Strait of Hormuz reopens in the future, the expansion of the Fujeirah port will provide the UAE with more flexible export options, enhancing its bargaining power in the global oil market. On April 28, 2026, the UAE suddenly announced its formal withdrawal from OPEC and the "OPEC+" mechanism starting from May 1, ending its membership of nearly 60 years. The UAE government statement said that this decision was based on national interests and made after a comprehensive evaluation of its oil production policy and current and future capacity. For the UAE, expanding bypass capacity is not only a business decision but also a core component of national security strategy. While the existing pipelines have not been directly attacked, facilities at both ends have been damaged by Iranian drones and multiple attacks - the starting point near Habshan was hit by an Iranian drone, and the Fujeirah port at the endpoint was attacked multiple times and shipments were temporarily suspended. These events indicate that even with bypassing the Strait of Hormuz, the infrastructure itself remains a vulnerable link. Therefore, the expansion includes not only capacity increases but also redundant designs and security upgrades for pipeline facilities and port facilities. May reshape the Gulf oil trade landscape The UAE's actions will have several impacts, reducing the global oil market's "Strait of Hormuz premium." As more crude oil can be directly loaded from the Gulf of Oman, the market's panic response to the Strait of Hormuz interruption will ease; enhancing the UAE's export flexibility, even if the Strait of Hormuz reopens in the future, ADNOC can dynamically allocate flow to both export channels based on factors such as oil prices and shipping insurance costs; providing a strategic reference for other Gulf countries, while Saudi Arabia already has pipelines to the Red Sea, the UAE's accelerated expansion may prompt countries like Qatar and Kuwait to reassess the security of their own export routes. Although the UAE has set a target for 2027, the expansion project faces dual uncertainties. In a context of continuing conflict and tight supply of materials, there are variables and risks in whether large-scale pipeline construction can be completed on schedule. Iran has demonstrated the will and ability to strike at the UAE's energy infrastructure, and significant defense resources need to be invested in the Fujeirah port and related pipelines, posing a persistent security threat. The UAE is reshaping its oil export geographic map at "war-time speed." By 2027, doubling the capacity to bypass the Strait of Hormuz will transform it from a vulnerable oil-producing country reliant on a single channel to an energy hub with strategic depth. This transformation is not only crucial for the UAE itself but will also have a far-reaching impact on the global flow of oil trade and the pricing of geopolitical risks.