Energy This Week | The National

There’s almost a sense of deja vu in the air in the UAE. The nearly one-month ceasefire that held peace in the region and allowed for a return to normality was violated on Monday. An Adnoc-owned oil tanker came under attack on Monday morning, and by the evening, UAE residents received multiple alerts as Iran launched 12 ballistic missiles, three cruise missiles and four drones into the country, with a few striking targets in Fujairah

Despite the maritime escalations off UAE waters, the director general of Fujairah Freezone, Sharief Al Awadhi, joined me on a panel at Make it in the Emirates - the biggest industry event to take place in the UAE since the war. His message was clear - the region had seen many shocks since the formation of the federation, and this was no different. While a two-month blockade of Hormuz, which hadn’t been anticipated, has dealt a severe shock to the supply of oil, there are other routes. Also joining the discussion were the heads of Abu Dhabi's Kezad, Ras Al Khaimah Economic Zone, Gulftainer and DP World - all of whom said they were doubling or even trebling capacity to the redirection of cargo flows from Hormuz.

A comment that stood out was from Abdullah Al Hashmi of DP World, who said that even at the height of the crisis, the Emirates didn’t run out of blueberries because they had leveraged their global network, particularly ports in India, to keep trade flowing smoothly.

In this edition, I write about the new ports and facilities that are becoming important as Hormuz remains under blockade.

With Hormuz closed, the UAE's east coast ports have become the region's lifeline, and operators are moving quickly to expand.

Khorfakkan: A deep-water container terminal with a capacity of around 5 million TEUs annually, located entirely outside Hormuz. Gulftainer CEO Farid Belbouab said on the panel yesterday that the scale of their response has been staggering. Truck movements into the port surged from 100 a day before the war began on February 28 to 7,000 a day within the first week of March. To manage the surge, Gulftainer created a dedicated marshalling yard called the ‘Khorfakkan Pre-Gate’, eliminating queues that once stretched for tens of kilometres and cutting gate-in and gate-out times to around 40 minutes.

The Khorfakkan–Sajaa Inland Corridor: Established to evacuate cargo from the port and free up berth space - a 90km link between the east coast terminal and Sajaa Dry Port in Sharjah, forming part of a tri-modal corridor that extends onward to Dammam, operated jointly with Saudi Ports Authority.

Al Dhaid Dry Port (forthcoming): Gulftainer is set to announce a new dry port in Al Dhaid, a city in central Sharjah, in the coming days, according to Mr Belbouab. The facility would add a second inland node alongside Sajaa, deepening the corridor between Khorfakkan and the wider UAE market

Fujairah: The Habshan–Fujairah pipeline runs crude directly from Abu Dhabi's oil fields to the coast, bypassing Hormuz entirely. Combined bypass pipeline capacity across the UAE and Saudi Arabia is estimated at 3.5 to 5.5 million barrels per day.

Etihad Rail: A critical land link, moving 459,000 tonnes across 100-plus freight journeys in the first two weeks of the crisis alone on its 900km network running from the Saudi border to Fujairah.

Other notables: Oman's Salalah and Sohar are also absorbing the overflow. Salalah's capacity was raised to 6.5 million TEUs following a $300 million expansion last year.

Saudi Arabia's Yanbu and Jeddah are also handling energy and cargo rerouting on the Red Sea. Saudi Arabia is also repositioning its $500 billion Neom futuristic mega-city project. The Port of Neom has opened a new corridor linking European cargo via Trieste, Damietta and Safaga and is already being used by importers from Italy, the UK, Germany and Poland.

Bottom line: The blockade has exposed just how much latent capacity existed outside Hormuz. The war has forced operators to activate it almost overnight. The UAE's east coast is becoming an increasingly important corridor with Fujairah, Khorfakkan, Sajaa and soon Al Dhaid becoming indispensable to regional trade.

The UAE left Opec on May 1 after more than five decades as a member. Free from quota constraints, which capped production at 3.2 million bpd despite holding a capacity of 4.85 million bpd, the UAE is now free to bring on more supply.

State producer Adnoc has moved immediately. Its $150 billion, five-year capex programme, announced last November, is now being fast-tracked for execution. On Sunday, at the first-ever Make it with Adnoc forum, the company said $55 billion in project contracts will be awarded over the next three years, with $60 billion earmarked for local supply chains. Around 60 to 70 per cent of raw materials for the industry are locally sourced, but advanced components remain import-dependent. The war has accelerated localisation, with Adnoc now offering guaranteed offtake at fixed volumes and prices to close that gap.

Bottom line: The Opec exit is accelerating the rapid deployment of Adnoc’s $150 billion capex program, which covers onshore and offshore developments.

Bottom line: Markets will be watching how Abu Dhabi brings back roughly 1.4 million bpd of restricted output. Sources told The National the increase is set to come "gradually".

Chart of the week

Big number

The surge in daily truck movements into Khorfakkan since the war began - from 100 trucks a day before February 28 to 7,000 a day within the first week of March.

ICV is a government policy framework that requires companies, particularly those working with state entities like Adnoc, to spend a proportion of their contracts inside the UAE economy.