Construction of a pipeline from Abu Dhabi's largest oilfields to Fujairah, allowing crude to bypass the Strait of Hormuz, has been completed.
The pipeline to the Arabian Sea promises greater security in the event that the narrow waterway is closed, and promises to help cut the costs of exporting oil from the UAE.
About 40 per cent of the world's international oil trade, including all of Abu Dhabi's exports of about 2 million barrels daily, passes through the strait.
Testing for leaks and structural integrity, which must precede the 370km pipeline's entry into service, will begin next month, said Khadem al Qubaisi, the managing director of the International Petroleum Investment Company (IPIC), which owns the pipeline.
Last year, Dh257 billion (US$69.96bn) worth of Abu Dhabi's crude passed through the strait, which lies between Iran and Oman. Iran and Iraq attempted to close the waterway in the 1980s in the so-called tanker war during the Iran-Iraq War. In April the head of Iran's Islamic Coalition Party said that if the republic were attacked it would try to close the waterway again.
In July, a Japanese tanker carrying crude oil from Ruwais to Japan was struck by a small boat containing explosives, blowing glass out of portholes, injuring a crew member and leaving a crater in the hull. A group calling itself the Abdullah Azzam Brigades claimed responsibility in a message on its website. Last month, the UAE Armed Forces opened a naval base in Fujairah.
By routing crude overland from its Habshan oilfields to the Fujairah coast, Abu Dhabi will also save on the cost of insurance for shipments through the Strait of Hormuz and speed delivery of crude to the international market.
For now, the planned capacity of 1.5 million barrels per day (bpd) of the Abu Dhabi Crude Oil Pipeline (ADCOP) would be more than half of the emirate's daily crude output.
"This certainly shows that you can bypass the straits," said Robin Mills, an oil analyst at Emirates National Oil Company in Dubai and a business columnist for The National.
IPIC began construction of the pipeline in 2008 and hoped to finish last year, but completion was delayed by difficulties in procuring building materials. IPIC plans for the pipeline to reach a maximum capacity of 1.8 million bpd.
The pipeline is a boon for Fujairah, which will see significant investment. The emirate is already a major bunkering and refuelling centre, second in importance only to Singapore. But the new naval base, a new oil export terminal and a planned 500,000 bpd refinery to be built by IPIC and ConocoPhillips have all helped to boost Fujairah's economy.
The emirate's prominence as a world energy hub is also bolstered by the plans of national and foreign companies to double the number of fuel storage tanks on its coast in the next three years. About 10,000 vessels pass through its port each year.
* With additional reporting by Hashim al Mohammed
business@thenational.ae
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Ten tax points to be aware of in 2026
1. Domestic VAT refund amendments: request your refund within five years
If a business does not apply for the refund on time, they lose their credit.
2. E-invoicing in the UAE
Businesses should continue preparing for the implementation of e-invoicing in the UAE, with 2026 a preparation and transition period ahead of phased mandatory adoption.
3. More tax audits
Tax authorities are increasingly using data already available across multiple filings to identify audit risks.
4. More beneficial VAT and excise tax penalty regime
Tax disputes are expected to become more frequent and more structured, with clearer administrative objection and appeal processes. The UAE has adopted a new penalty regime for VAT and excise disputes, which now mirrors the penalty regime for corporate tax.
5. Greater emphasis on statutory audit
There is a greater need for the accuracy of financial statements. The International Financial Reporting Standards standards need to be strictly adhered to and, as a result, the quality of the audits will need to increase.
6. Further transfer pricing enforcement
Transfer pricing enforcement, which refers to the practice of establishing prices for internal transactions between related entities, is expected to broaden in scope. The UAE will shortly open the possibility to negotiate advance pricing agreements, or essentially rulings for transfer pricing purposes.
7. Limited time periods for audits
Recent amendments also introduce a default five-year limitation period for tax audits and assessments, subject to specific statutory exceptions. While the standard audit and assessment period is five years, this may be extended to up to 15 years in cases involving fraud or tax evasion.
8. Pillar 2 implementation
Many multinational groups will begin to feel the practical effect of the Domestic Minimum Top-Up Tax (DMTT), the UAE's implementation of the OECD’s global minimum tax under Pillar 2. While the rules apply for financial years starting on or after January 1, 2025, it is 2026 that marks the transition to an operational phase.
9. Reduced compliance obligations for imported goods and services
Businesses that apply the reverse-charge mechanism for VAT purposes in the UAE may benefit from reduced compliance obligations.
10. Substance and CbC reporting focus
Tax authorities are expected to continue strengthening the enforcement of economic substance and Country-by-Country (CbC) reporting frameworks. In the UAE, these regimes are increasingly being used as risk-assessment tools, providing tax authorities with a comprehensive view of multinational groups’ global footprints and enabling them to assess whether profits are aligned with real economic activity.
Contributed by Thomas Vanhee and Hend Rashwan, Aurifer
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Chef Nobu's advice for eating sushi
“One mistake people always make is adding extra wasabi. There is no need for this, because it should already be there between the rice and the fish.
“When eating nigiri, you must dip the fish – not the rice – in soy sauce, otherwise the rice will collapse. Also, don’t use too much soy sauce or it will make you thirsty. For sushi rolls, dip a little of the rice-covered roll lightly in soy sauce and eat in one bite.
“Chopsticks are acceptable, but really, I recommend using your fingers for sushi. Do use chopsticks for sashimi, though.
“The ginger should be eaten separately as a palette cleanser and used to clear the mouth when switching between different pieces of fish.”
