Emirates readies oil export detour to avoid Hormuz
FUJAIRAH, United Arab Emirates — By night, the lights of dozens of ships anchored off this eastern Emirati port create the mirage of a far-off city at sea.
The crowded anchorage reflects Fujairah’s rise as one of the world’s busiest maritime refueling stations. Soon it will also become a vital new exit route for Arabian crude oil destined for world markets.
The United Arab Emirates is nearing completion of a pipeline through the mountainous sheikdom that will allow it to reroute the bulk of its oil exports around the Strait of Hormuz at the mouth of the Gulf, the path for a fifth of the world’s oil supply.
Iran has repeatedly threatened to close the strategically sensitive waterway, which is patrolled by Iranian and U.S. warships, in retaliation for ramped-up Western sanctions over Tehran’s nuclear ambitions.
That threat has raised worries among Gulf countries that conflicts could block the route to market for their most lucrative resource. But only the UAE and Oman have coastlines on the Indian Ocean side of the strait that would enable them to go around the chokepoint by land. Saudi Arabia also can avoid Hormuz by shipping its Gulf fields’ oil production out of its Red Sea ports, but it would have to increase the capacity of those ports and of pipelines running across the breadth of the country to handle its total output.
With the Emirates’ new pipeline, oil from fields deep in the Abu Dhabi desert would travel 236 miles overland and across the barren Hajar mountains to this fast-growing port on edge of the Indian Ocean.
At the moment, Emirati oil exports are loaded in the Gulf and must pass through Hormuz. Once it’s running at full volume, the pipeline will let the UAE get two-thirds of its peak oil production to market even if the strait is shut. That’s about 10 percent of the total 17 million barrels of oil a day that goes through Hormuz.
The director general of Fujairah municipality, Mohammed Saif al-Afkham, told The Associated Press he expects the pipeline to be commissioned this month.
Officials have not announced a firm starting date. But al-Afkham’s comments and those of other Emirati officials suggest exports could begin soon. Energy Minister Mohammed bin Dhaen al-Hamli told a Paris conference last month the four-foot-wide pipeline is finished and is being tested.