Middle East Conflict: UAE Lays New Pipeline To Battle Strait Of Hormuz Crisis; Major Boon For India?

Dubai: The United Arab Emirates (UAE) announced plans on Friday to accelerate the construction of a major oil pipeline. The objective of this pipeline is to double the country's crude oil export capacity via Fujairah by 2027. This initiative will significantly enhance its ability to bypass the Strait of Hormuz amidst current regional tensions linked to the Iran-US-Israel conflict. India stands to benefit the most from this pipeline, as it will be able to import a substantial portion of its energy requirements from the UAE.

Will the New Pipeline Become Operational in 2027?

According to the Abu Dhabi Media Office, Abu Dhabi Crown Prince Khaled bin Mohamed bin Zayed Al Nahyan directed the Abu Dhabi National Oil Company (ADNOC) to expedite work on the West-East pipeline project during an Executive Committee meeting. This pipeline is currently under construction and is expected to become operational in 2027. Officials did not disclose the original timeline for the project's completion.

Does UAE ​​Possess Access to Gulf of Oman?

The UAE already operates the Abu Dhabi Crude Oil Pipeline (ADCOP), also known as the Habshan-Fujairah pipeline. Bypassing the Strait of Hormuz, this pipeline is capable of transporting up to 1.8 million barrels of crude oil per day directly to the coast of the Gulf of Oman.

Does UAE ​​and Saudi Arabia Possess Alternatives?

Currently, the UAE and Saudi Arabia are the only oil-producing nations in the Gulf region possessing the infrastructure to export crude oil from outside the Strait of Hormuz, while Oman benefits from its extensive coastline along the Gulf of Oman. In contrast, Kuwait, Iraq, Qatar, and Bahrain remain heavily dependent on this strategic waterway for their energy exports.

Will India Benefit from UAE's New Pipeline?

India stands to gain the most from the UAE's new pipeline. Currently, the Strait of Hormuz is closed. Consequently, India's energy security faces a threat. India imports the oil and gas it requires from various nations, with the Gulf countries being the primary suppliers. Under these circumstances, India can import as much oil as it desires through the UAE's new pipeline. Moreover, since the UAE has withdrawn from both OPEC and OPEC+, it is no longer subject to any production quota restrictions.