UAE races to finish second Hormuz bypass pipeline as blockade hits 11 weeks

UAE races to finish second Hormuz bypass pipeline as blockade hits 11 weeks A new Emirati export route could redraw Gulf oil flows and pull more crude clear of the strait by 2027. The United Arab Emirates has built nearly 50% of a second crude pipeline designed to bypass the Strait of Hormuz, ADNOC chief executive Sultan Ahmed Al Jaber said on Wednesday (2026-05-20). The project would double the country's Fujairah export capacity by 2027, the Abu Dhabi Media Office said on Friday (2026-05-15).^2,3 The urgency comes from the blockade. The closure of the Strait of Hormuz, now approaching its 11th week, has removed more than 1 billion barrels of oil from global markets, Al Jaber said, with nearly 100 million more lost for every week the waterway stays shut.^2,1 Before the Iran war the strait carried about 21 million barrels per day in 2022, roughly 21% of global petroleum liquids consumption, according to EIA data.⁴ The UAE has already pushed some exports through its existing Fujairah pipeline on the Gulf of Oman, which tops out at 1.8 million barrels per day.² The second line, still only about half-built, is what would let Abu Dhabi move the bulk of its crude outside the strait.^2,3 The pipeline is not the only move. On Tuesday (2026-05-19) the UAE said it would leave OPEC and OPEC+ effective May 1, 2026.^5,6 The Nation reported that Abu Dhabi had already been producing above its agreed quota, casting the exit as a calculated strategic step rather than a sudden break.⁶ Taken together, the buildout and the OPEC departure point to a producer positioning for higher output once the strait reopens.^2,5 Saudi Arabia holds spare bypass capacity of its own. Saudi Aramco runs the 5-million-barrel-per-day East-West crude pipeline and briefly lifted it to 7 million in 2019 by converting some natural gas liquids lines to carry crude.⁴ The EIA estimates roughly 3.5 million barrels per day of effective unused pipeline capacity exists across the Gulf to route oil around the strait.⁴ Iraq has the weaker hand. The EIA's inventory of routes that skirt Hormuz covers Saudi and Emirati pipelines, with no equivalent for Iraqi barrels, which still move by tanker through the strait.⁴ ICE Brent crude front-month settled at $94.28 on Monday (2026-06-08), barely changed on the day, leaving traders to weigh how fast supply comes back once the blockade lifts.² [LIVE PRICES] The market reading stays firmly bullish while the strait is shut.² Yet the export buildout and the OPEC exit seed a bearish risk further out. Once the strait reopens, the UAE and potentially Saudi Arabia could return barrels faster than the market expects.⁴ In 2022, 82% of the crude and condensate moving through Hormuz went to Asian buyers, EIA data show, so the sharpest price impact of any reopening would land on Asian refiners and Middle East crude differentials.⁴ Al Jaber put the rationale plainly. "Right now, too much of the world's energy still moves through too few chokepoints," he said, and the second pipeline is built to cut that dependence.² The near-term test is whether the UAE holds its 2027 completion date for a line that is still only about half-finished.^2,3 Even a clean resolution offers no quick relief: Al Jaber said flows would take at least four months to climb back to 80% of normal once the conflict ends.² For now the blockade sets the direction of crude, while the capacity going in behind it is what will move the market when Hormuz reopens.²