The United Arab Emirates has unveiled an ambitious plan to dramatically expand its oil export infrastructure, signalling one of the most significant strategic shifts in Gulf energy politics in decades. At the centre of this transformation is the accelerated expansion of the Habshan–Fujairah pipeline, often referred to as the West–East pipeline that will allow the UAE to bypass the increasingly volatile Strait of Hormuz almost entirely. Ordered by Abu Dhabi Crown Prince Sheikh Khaled bin Mohamed bin Zayed Al Nahyan, the Abu Dhabi National Oil Company’s fast-tracked project is expected to become operational by 2027.
The decision comes amid deepening instability in the Gulf following the recent US attack on Iran and Tehran’s retaliatory blockade of the Strait of Hormuz. For the UAE, the expanded pipeline is far more than an infrastructure project. It is part of a larger effort to protect its economy, secure independent export routes and establish itself as one of the world’s most dependable energy suppliers during a period of growing geopolitical uncertainty.
The Strait of Hormuz has long been regarded as one of the world’s most vulnerable energy chokepoints. Roughly one-fifth of global seaborne oil trade normally passes through the narrow waterway separating Iran from the Arabian Peninsula. Following the US-Israeli military campaign against Iran, Tehran imposed new maritime restrictions and effectively shut the passage, triggering a major disruption in global energy flows.
Now entering its 11th week, the blockade has sent oil and gas prices soaring, rattled financial markets and revived fears of a global economic slowdown. Several countries have already begun introducing fuel rationing measures as supply chains tighten. Gulf economies heavily dependent on Hormuz, including Kuwait, Iraq, Qatar and Bahrain, have found themselves dangerously exposed.
The UAE, however, has been better positioned than most of its neighbours because of its earlier investments in alternative export routes. Since 2012, the country has relied on the Abu Dhabi Crude Oil Pipeline, commonly known as the Habshan-Fujairah pipeline. Stretching roughly 380 kilometres from the Habshan oilfields in Abu Dhabi to the port of Fujairah on the Gulf of Oman, the pipeline bypasses Hormuz completely.
With a carrying capacity of between 1.5 and 1.8 million barrels per day, it has allowed the UAE to continue exporting crude even as shipping traffic through Hormuz collapsed. ADNOC has also resorted to ship-to-ship crude transfers and other logistical workarounds to maintain supplies.
Yet the existing infrastructure has not been enough to fully support the UAE’s production ambitions. Before the conflict erupted, the country was producing slightly above 3 million barrels per day. Wartime disruptions and export bottlenecks have since reduced effective output to around 1.8 to 2.1 million barrels daily.
The second West-East pipeline is intended to change that equation completely. Once completed in 2027, the expanded network is expected to double the UAE’s bypass export capacity through Fujairah to between 3 and 3.6 million barrels per day. Such an increase would place the UAE much closer to Saudi Arabia in terms of strategic export flexibility.
Currently, Saudi Arabia is the only Gulf producer with a comparable bypass system through its massive East-West pipeline running to the Red Sea port of Yanbu. The UAE’s new infrastructure will therefore strengthen its position as a regional energy power capable of maintaining exports even during severe regional conflict.
The pipeline expansion is also closely tied to a major shift in Emirati energy policy. The UAE officially withdrew from the Organization of the Petroleum Exporting Countries on May 1 after nearly six decades of membership. Abu Dhabi justified the decision by arguing that it needed greater freedom to pursue its own national interests.
The departure exposed widening tensions with Saudi Arabia, the cartel’s dominant force. Riyadh has traditionally favoured strict production quotas aimed at supporting higher global oil prices. The UAE, by contrast, has increasingly prioritised market share, infrastructure expansion and long-term production growth.
The UAE is no longer bound by the output ceilings of around 3 to 3.5 million barrels per day that once constrained it within OPEC. ADNOC currently holds upstream production capacity of roughly 4.85 million barrels daily, with ambitions to push this to 5 million by 2027 through substantial investment in oilfields and extraction technology.
The new pipeline sits at the heart of that ambition. Without expanded export infrastructure, ramping up production would simply pile pressure onto transport routes that were never designed to carry such volumes. By carving out a secure bypass around the Strait of Hormuz, the UAE is making sure its growing crude output can find its way reliably to global markets, whatever storms may be brewing in the region.
The implications are particularly significant for Asian economies that depend heavily on Gulf energy supplies. India has emerged as one of the UAE’s most important strategic partners during the crisis. Prime Minister Narendra Modi travelled to Abu Dhabi yesterday to finalise a broad energy agreement alongside announcements of major Emirati investments in India.
As part of the deal, India has agreed to allow the UAE to store up to 30 million barrels of crude oil in India’s strategic petroleum reserves. The two countries also agreed to cooperate on strategic gas storage and long-term liquefied petroleum gas supplies. The arrangement gives the UAE an important strategic advantage. By positioning crude reserves directly inside one of its largest consumer markets, Abu Dhabi can partially shield its exports from future Gulf disruptions. And it will help India to maintain price stability at a period of global volatility.