Applied Directive Never Offering Concern

Nice and mystical, but it is al in the title. The guardian gives us (at https://www.theguardian.com/business/2026/may/15/uae-oil-pipeline-strait-of-hormuz-by-2027) ‘UAE to complete second oil pipeline bypassing strait of Hormuz by 2027’ as such, with a year the problem with the strait of Hormuz and posing a setting for Iran, it is taken out of the equation. I admit that it is simpler than digging a trench from Sharjah to the east coast of the UAE, it is simpler and as such I love the idea. We are given “Sheikh Khaled bin Mohamed bin Zayed Al Nahyan, Abu Dhabi’s crown prince, has directed the UAE state oil company to fast-track the previously undisclosed project so that the pipeline can begin carrying oil from the emirates to the port of Fujairah by 2027. The new pipeline is expected to double the UAE’s export capacity via the existing Habshan-Fujairah pipeline which can carry up to 1.8m barrels a day to the port on the Gulf of Oman.” I am considering the idea that optionally expanding that port would give way to a fleet of tankers parking (5-8 ships). It would enable additional options as well, but it is straight out of mind thinking and I have no idea what there is now. There is the setting that these ships might require overhauls, but that is because I have seen the needs of takers in my youth in Rotterdam (predominantly Europoort & Maasvlakte) and I think that similar conditions might be required. So whilst we accept that “The UAE and Saudi Arabia are the only Gulf producers with pipelines that export crude outside the narrow waterway running between Iranian and Omani territory.” The fact that the UAE deleted itself from OPEC opens up other settings, they would have no limits to go though which they apparently had in the past, as such they could release close to their own maximum settings overriding what was previously allowed through OPEC. So, as I see it “Leaving the oil cartel was expected to allow the UAE, the group’s third-largest oil producer, to pump more oil than the group’s future production quotas may allow once the conflict ends and normal trade through the strait of Hormuz resumes.”

There is the idea that this might (I am completely uncertain about this) be paid back in mere months after which that new pipeline will bring in a pretty penny and restores the old prices of oil by 2028/2029. It would be nice to see Iran lose another setting, which they will oppose, but it is out of the waters of Iran, so they don’t get to have a word on this. And as Iran made it a case to bomb the UAE for all it could, it is nice to see them come in last in a race with limited players. 

So whilst we see “The UAE’s departure has laid bare the long-running tensions between Abu Dhabi and Riyadh, with the Saudis normally favouring strict production quotas to keep oil prices high enough to support their economic agenda. The exact capacity of the new pipeline has not been disclosed but doubling its existing capacity to 3.6m barrels a day would bring the UAE’s pipeline exports closer to that of Saudi Arabia, which can transport roughly 7m barrels a day from its eastern oilfields to the Red Sea port of Yanbu, of which 5m barrels are exported.” And with that Iran will have angered the Arabic nations to another level, because it will dig into the Saudi pennies and they will not accept that lying down. If only they have refrained from bombing the Arabic nations, they might not have gotten themselves into this predicament a clear showing of how limiting the Iranian thinking patterns are. A clear setting that pretty much any oil country could have considered and now we see where that is getting them. For the UAE, who got this project started it means that several advances will get green lighted sooner rather than later. 

So have a great day and consider that the UAE got a solution working in weeks and it is more elegant that my solution of making a canal, so the bulk of tankers don’t have to look at Iran at all. Simplicity itself.