World
UAE’s Hormuz workaround tries to bypass its trillion-dollar economic heart
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Geography has handed the United Arab Emirates quite the quandary: its government wants to cut dependence on the Strait of Hormuz to “zero”, yet the ports that power its economy sit squarely inside the waterway it hopes to avoid.
Jebel Ali and Khalifa ports collectively handle most of the UAE’s US$1 trillion in annual non-oil trade, much of which flows to and from Asia. Together, they form the single most vital link in a logistics corridor stretching from Singapore to Europe – a status not easily replicated.
But war has a way of necessitating the impossible. With the United States and Iran locked in a seemingly intractable conflict, nervous exporters across Asia have been hedging their bets – and Oman’s ports are the immediate beneficiaries.
Duqm, Salalah and Sohar are all enjoying something of a renaissance, attracting shipping lines, investors and billion-dollar free-zone deals as cargo owners seek routes free from Hormuz’s volatility.
The UAE has its own ports along the Gulf of Oman and Minister for Foreign Trade Thani Al Zeyoudi has outlined plans to pour investment into Khor Fakkan, Fujairah and Dibba, as well as an entirely new facility to be built on the country’s east coast.
“We’re moving towards having zero Hormuz dependency and that’s regardless of whether it’s open or not,” Zeyoudi told Bloomberg last month, framing the strategy as insurance. “It’s going to open and we hope that will happen quickly, but we will not stop the new plan.”
