UAE expands energy corridors, advances partnerships to strengthen energy security
The UAE is to fast-track the expansion of ADNOC’s pipeline network linking Abu Dhabi’s Habshan fields to the Port of Fujairah, aiming to double capacity by 2027.
The existing west-east connection has proven crucial to the energy major's oil exports as the Israel/US conflict with Iran has kept the Strait of Hormuz essentially closed to seaborne cargoes.
The Abu Dhabi Crude Oil Pipeline (ADCOP) began operating in 2012, and confirmation of its expansion, aimed at reinforcing the UAE’s role as a reliable global energy supplier, has been confirmed as the country pledges a broader strategy to bolster infrastructure capacity.
Future capacity
The initial 360km Habshan–Fujairah pipeline reportedly cost $4.2 billion.
It has the capacity to transport 1.5-1.8 million barrels of crude oil daily — a substantial share of the UAE’s total oil exports. It has gained greater importance in recent weeks by enabling the continuation of crude exports without the UAE relying entirely on Hormuz, the route for a fifth of annual global oil supplies, through which ~80 tankers pass daily.
Expanding the pipeline will further establish Fujairah as a leading bunkering and oil storage hub on the Gulf of Oman.
Large-scale investments in storage terminals, refining facilities, and maritime services, including ADNOC's investments in crude storage and export infrastructure, have increased Fujairah’s significance in global energy supply chains.
The effectiveness of ADCOP has underscored the need to expand capacity to support future production growth following the UAE’s exit from OPEC on 1 May. The country plans to increase oil production capacity to 5 mbpd by 2027 through continued investment in upstream and export infrastructure.
Energy security
ADNOC is part of a consortium of global investors committing $30 billion to infrastructure projects across the Gulf and Central Asia, as announced last week.
The group, which includes Abu Dhabi’s sovereign wealth fund L’imad, BlackRock’s Global Infrastructure Partners (GIP), and Singapore’s Temasek, stated it will consider opportunities in sectors such as energy, transport, water, and waste management.
The statement added that the aim would be to accelerate the development and expansion of critical infrastructure assets.
Dr Sultan Al Jaber, Minister of Industry and Advanced Technology and ADNOC Managing Director and Group Chief Executive, said the initiative targets “disciplined investments” across a diversified pipeline of “high-quality opportunities”.
He continued: “ADNOC is focused on strengthening long-term energy security, supporting economic resilience, and enabling sustainable value creation.”
Dr Al Jaber added on social media platform X that the strategic partnership “will advance the infrastructure that supports sustainable economic development in high-growth markets across Asia”.
The UAE and Jordan recently signed an agreement to build and operate a $2.3 billion railway linking Jordan’s mining areas to Aqaba port. The 360km project is the first step in building a Jordanian national rail network connecting Aqaba with neighbouring Arab countries, including ports in Syria and the Mediterranean.
Disciplined investments
The consortium’s announcement comes as many governments around the world are stepping up domestic actions amid an historic energy crisis, as oil and LNG from Gulf suppliers remain largely trapped.
The International Energy Agency (IEA) estimates that 76 nations have now implemented emergency measures, up from 55 at the end of March, as oil stockpiles decline due to the conflict.
Analysts and commodity traders have warned that oil prices could jump again sharply unless more fuel blockaded in the Gulf can be exported. This, along with supply shortages, could prompt greater fuel rationing and cripple global growth.
Paul Diggle, Chief Economist at fund manager Aberdeen, told the Financial Times that his company is examining a scenario in which Brent crude rockets to $180 a barrel, causing surging inflation and recessions in European and Asian countries.
Hormuz must reopen
Dr Al Jaber said Iran’s blockade of the Strait amounts to an “arithmetic of extortion” and demanded unconditional restoration of free navigation as the cumulative toll on global oil supply crosses one billion barrels.
Posting on X, he said: “Every day the Strait is held hostage, the costs go up — for families, farms, factories and economies around the world.
“The world is already 1 billion barrels short because of the closure of Hormuz. That is the arithmetic of extortion.”
Dr Al Jaber’s post added: “Return freedom of navigation. No conditions. No delay.”
The IEA estimated global oil consumption in Q2 to be about 6 mbpd above production levels. That is 2-3 mbpd less than the shortfall suggested by some analysts, and a massive swing from the surplus originally forecast before the Middle East conflict.
ADNOC Gas said in early May that it aims to restore 80% of processing capacity at its Habshan complex by the end of this year.
As one of the world's largest gas processing sites, the complex sustained significant damage during Iran's attacks on the UAE in April.
