UAE delays project to bypass the Strait of Hormuz

Published January 9th, 2012 - 07:07 GMT
Iran navy
Iran navy

The UAE has been forced to delay the construction of a pipeline allowing oil to bypass the Strait of Hormuz due to construction problems.  The project, estimated at $3.3 billion, has as many as 270 construction problems that have pushed the completion date back to April at the earliest.  Exports were originally planned to begin in January from Abu Dhabi, which controls most of the UAE’s oil reserves.

The pipeline, which would transport around 1.5 million bpd, would ensure that the UAE could continue to export cruse oil, even if Iran were to blockade the strait.  Currently, around one-fifth of the world’s traded oil exits the Persian Gulf through Hormuz, and an average of 14 tankers go through the strait per day.  As western countries have tightened sanctions against Iran, worries increase that the strait might be closed in retaliation.

The pipeline’s owner, International Petroleum Investment Co, has been keeping mum about when building would begin.  Once the pipeline has been built, it wlll transport crude oil through Abu Dhabi’s onshore oil fields to the port of Fujairah, a distance of over 230 miles.  Then tankers would ship out from Fujairah rather than Abu Dhabi, which would save 2 days of sailing time, worth about $38,000.  The primary goal of the project according to IPIC, which is government-run, is to reduce shipping congestion.

Most of the oil exported by Saudi Arabia, Iraq, Kuwait, the UAE, Qatar and Iran pass through the Strait of Hormuz, making it the world’s most important checkpoint. Overall, 17 million barrels travel through daily. (Source:


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