UAE Weighs Third Oil Pipeline to Bypass Hormuz as Energy Security Risks Rise

The United Arab Emirates is reportedly considering a third crude export pipeline connecting its western oil-producing region with Fujairah, potentially giving the country another route that avoids the Strait of Hormuz. However, ADNOC has disputed the report and described it as inaccurate and speculative, meaning the proposed project has not been officially confirmed or approved.

Key Takeaways

• The UAE is reportedly evaluating a third crude pipeline from its western coast to Fujairah.
• The proposed route could potentially be opened to other Gulf producers or third-party users.
• ADNOC has rejected the report as inaccurate and “purely speculative.”
• The existing Habshan-Fujairah pipeline can transport close to 2 million barrels per day.
• A second pipeline is already under construction and is expected to begin operating in 2027.
• Additional export capacity could reduce the oil market’s exposure to disruptions in the Strait of Hormuz.

What Is Known About the Reported Third Pipeline?

Bloomberg reported that ADNOC was assessing another pipeline capable of carrying crude oil from production centres in western Abu Dhabi to Fujairah on the Gulf of Oman.

Unlike ports inside the Persian Gulf, Fujairah allows tankers to load crude without passing through the Strait of Hormuz. The reported pipeline could also potentially be available to third-party users, providing another export route for regional producers during shipping disruptions.

People familiar with the reported discussions said ADNOC had spoken with some Asian customers about the concept. However, no final route, construction schedule, capacity or investment decision has been disclosed.

ADNOC directly challenged the report, saying it had informed Bloomberg that the information was inaccurate and purely speculative. The proposed third pipeline should therefore be viewed as an unconfirmed strategic option rather than an approved infrastructure project.

The UAE Already Has a Pipeline Bypassing Hormuz

The UAE currently operates the Abu Dhabi Crude Oil Pipeline, also known as the Habshan-Fujairah pipeline or ADCOP.

The approximately 400-kilometre route carries crude from Abu Dhabi’s onshore production facilities to Fujairah. Its original capacity was around 1.5 million barrels per day, although it is now believed to be capable of transporting approximately 1.8 million to 2 million barrels per day.

The International Energy Agency estimates that the UAE normally sends around 1.1 million barrels per day through the route, potentially leaving up to 700,000 barrels of additional capacity during a Strait of Hormuz disruption.

The pipeline has become one of the UAE’s most strategically important energy assets. It allows crude to reach international markets from the country’s eastern coast, reducing reliance on tankers navigating waters exposed to military attacks, blockades and rising insurance costs.

Second Fujairah Pipeline Is Due in 2027

ADNOC is already building a second pipeline between western Abu Dhabi and Fujairah.

Construction began in 2025 and was approximately 50% complete by May 2026. The project is expected to become operational in 2027 and double the UAE’s crude export capacity through Fujairah.

ADNOC has reportedly told some Asian refiners that they could begin collecting supplies delivered through the new route in early 2027. The additional capacity would support the UAE’s position as a reliable energy supplier even when shipping through the Persian Gulf becomes difficult.

The confirmed second pipeline is separate from the speculative third project. It remains the most important near-term addition to the UAE’s export infrastructure.

Why Does the Strait of Hormuz Matter?

The Strait of Hormuz is one of the world’s most important energy chokepoints. It is only about 39 kilometres wide at its narrowest point, with inbound and outbound shipping channels measuring approximately 3.7 kilometres each.

Nearly 20 million barrels per day of crude oil and refined products passed through the strait in 2025, representing about 25% of global seaborne oil trade. Around 80% of those shipments were destined for Asian markets.

The strait is also critical for liquefied natural gas. Approximately 96% of UAE LNG exports and 93% of Qatar’s LNG exports normally use the route. Together, those shipments represent close to one-fifth of global LNG trade.

A prolonged closure would therefore affect far more than Gulf producers. China, India, Japan and South Korea would face supply risks, while oil and gas prices would likely rise worldwide.

Iran War Exposed the Risks of Relying on Hormuz

The US-Iran conflict demonstrated how quickly the strait can become inaccessible.

Oil flows through Hormuz fell from approximately 20 million barrels per day before the conflict to an average of only 2.7 million barrels per day between March and May 2026.

The UAE used its Fujairah pipeline, storage facilities and alternative shipping arrangements to maintain exports. Its crude shipments recovered from about 1.9 million barrels per day in March to 4.3 million barrels per day in early June, equivalent to roughly 85% of pre-war levels.

The disruption also demonstrated the limitations of existing alternatives. Saudi Arabia and the UAE are the only Gulf producers with substantial operational pipeline capacity that can bypass Hormuz. Countries including Kuwait, Qatar, Bahrain and Iraq remain much more dependent on the waterway.

Could Another Pipeline Affect Oil Prices?

A third UAE pipeline would not immediately change global crude supply because construction would require several years and billions of dollars in investment.

Its longer-term effect could nevertheless be significant. More bypass capacity would reduce the probability that a temporary Strait of Hormuz closure removes millions of barrels from the global market.

That could lower the geopolitical risk premium embedded in Brent crude, reduce tanker charter and insurance costs, and give Asian refiners greater confidence in UAE supply contracts.

However, pipelines would not eliminate regional risks. Fujairah and other energy facilities can still be targeted by missiles or drones. Additional oil pipelines would also do little to solve disruptions to LNG shipments, which remain heavily dependent on maritime routes.

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What Happens Next?

Investors will need to watch for an official ADNOC announcement before treating the reported third pipeline as a confirmed project.

The most important details would include its capacity, route, completion date, cost and whether other producers could access it. The progress of the confirmed second pipeline will also remain important as the UAE targets higher Fujairah export capacity in 2027.

Even if the third project does not proceed, the report highlights the strategic direction of UAE energy policy: expanding pipelines, storage, ports, roads and rail connections to reduce exposure to the Strait of Hormuz.

For global oil markets, that strategy could eventually provide a larger buffer against Middle East supply shocks. In the short term, however, Brent crude will remain highly sensitive to US-Iran negotiations, shipping security and any renewed disruption around Hormuz.

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