UAE says new pipeline bypassing the Strait of Hormuz is nearly 50% complete
UAE officials said the construction of a new crude pipeline designed to bypass the Strait of Hormuz and deliver oil directly to the Fujairah terminal on the Indian Ocean is nearly 50% complete. The project sits at the heart of efforts to reduce shipping risk from the Iran war.
A UAE Ministry of Energy spokesperson told CNBC that construction on an expansion of the Habshan–Fujairah pipeline corridor is nearly 50% complete. The new line will allow crude to reach the Fujairah export terminal on the Indian Ocean coast without ever entering the Strait of Hormuz.
More than 160 tankers are currently waiting near Hormuz amid Iran-war-related disruption, and insurance premiums have tripled from pre-war levels. Industry analysts estimate that when finished the alternative route will add close to 1.5 million barrels of bypass capacity per day, securing roughly 8% of Gulf supply.
The US Department of Energy said the alternative routes can soften any supply shock but that a full Hormuz closure would still impact global markets. Brent futures held just below $99 a barrel after the news, with investors watching the diplomatic timetable announced by President Trump.
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