The move signals the Gulf’s shipping and energy infrastructure is now being rebuilt around the assumption that Hormuz closures will recur, not treated as a one off shock to ride out. A viable east coast alternative at Fujairah would, over time, reduce the leverage Iran holds over regional trade flows every time tensions flare, though any relief is measured in years rather than the current session. For now the plan reinforces rather than eases the near term risk premium in oil, since its very existence is a reminder of how severely the strait’s closure disrupted UAE trade only weeks ago. Longer term, added bypass capacity across Fujairah, Khor Fakkan and Dibba works against sustained structural upside in freight and insurance costs tied to the strait.
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Dubai is already building around the closure, not just recovering from the last one.
Summary:
- DP World is reportedly in talks to build a new multipurpose port and container terminal at Fujairah on the UAE’s east coast, creating a shipping route that bypasses the Strait of Hormuz entirely
- Fujairah already has a harbour but lacks the infrastructure to serve as a major export hub, and construction on the new facility could take as little as 18 months
- The UAE is also said to be upgrading infrastructure at Dibba and Khor Fakkan, with Gulftainer separately announcing a 2 billion dollar expansion at Khor Fakkan
- The push follows a collapse of as much as 95% in activity at Dubai’s flagship Jebel Ali port after Iran shut the Strait of Hormuz during the recent conflict, with cargo diverting to Fujairah and Khor Fakkan and causing congestion there
- The UAE pumped a record 4.1 million barrels per day in June after leaving OPEC, has pushed more crude exports through Fujairah, and has accelerated a second pipeline that will double the emirate’s export capacity from next year
- DP World has acknowledged it is pursuing diversification projects to prepare for future disruptions
The United Arab Emirates is moving to build permanent infrastructure that would allow it to bypass the Strait of Hormuz entirely. According to a Financial Times (gated) report, DP World, the UAE’s main port authority, is in talks to build a new multipurpose port and container terminal at Fujairah on the Gulf of Oman, creating a shipping route that avoids the strait altogether and reduces Dubai’s dependence on its flagship Jebel Ali hub in the Persian Gulf.
Fujairah already has an existing harbour but currently lacks the infrastructure needed to function as a major export hub. The report indicates construction on the new facility could take as little as 18 months, a timeline that stands out given ports are typically built to solve problems measured in decades rather than weeks. The UAE is reportedly also upgrading infrastructure at Dibba and Khor Fakkan, while port operator Gulftainer has separately announced a 2 billion dollar expansion at Khor Fakkan.
The urgency traces back to the disruption caused by the war. Iran’s closure of the Strait of Hormuz saw activity at Jebel Ali collapse by as much as 95%, with cargo diverting east to Fujairah and Khor Fakkan and quickly causing congestion at both. DP World has acknowledged it is now pursuing diversification projects specifically to prepare for future disruptions of this kind.
The same logic is playing out across the UAE’s energy sector. The country pumped a record 4.1 million barrels per day in June after leaving OPEC, has pushed more crude exports through Fujairah, and has accelerated plans for a second pipeline that will double export capacity from the emirate once it comes online next year. Each new berth, storage tank and pipeline built around Fujairah represents a little less dependence on a waterway that spent months this year demonstrating exactly how vulnerable it can become, and a clearer signal that Gulf infrastructure planning is now being built around the expectation that Hormuz will close again, and again, and again.
This article was written by fl6553e4b45d84486a91658a8b3f02bf22 at investinglive.com.