ADNOC dismisses as speculative a report of a third Hormuz-bypass line for other producers

Over time, a shared pipeline bypassing the strait would eat into the risk premium attached to Hormuz, because it would give producers elsewhere in the Gulf an export route that avoids the waterway. The denial from ADNOC, however, makes it unlikely the report will move crude prices in the near term; the premium is still tied to attacks on shipping and to the volume of traffic moving through the strait. The second line slated for 2027 is the more solid supply factor and has the potential to soften Asian buyers' exposure to any Hormuz disruption. Repeated strikes on Fujairah also cap how much reassurance traders can draw from bypass capacity, leaving the infrastructure itself a source of risk.

Had that project actually moved forward, the UAE would have been transformed, no longer simply a state that skirts Hormuz but one offering a route around it.

Summary:

• Bloomberg reported that ADNOC is considering a third pipeline stretching from the UAE's west coast to Fujairah, a route that would bypass Hormuz
• Third-party access was a possibility for the line, which had been discussed with some Asian customers, although plans remain unfinished
• In ADNOC's view, the report was not accurate and was nothing more than speculation
• An operational pipeline already carries about 2 million barrels a day, and another, set to start up in 2027, would take that total to roughly twice the level
• The UAE, Saudi Arabia and Kuwait are all seeking to lessen their dependence on the strait
• Fujairah and Saudi Arabia's East-West pipeline have each been attacked during the war

Abu Dhabi National Oil Co. has pushed back on reporting that it is weighing a third crude line around the Strait of Hormuz. Bloomberg's account describes the project as one that other producers could also use, turning the UAE's east coast into a broader export point for Gulf oil.

In a Wednesday report, Bloomberg said, citing people with knowledge of the matter, that ADNOC was looking at a new pipeline linking the UAE's western coast to Fujairah, a port on the Gulf of Oman that lies outside the strait. The pipeline might be opened to third parties, and ADNOC had outlined the idea to some Asian customers, the story said; it added that the project was still preliminary and the route might shift. Neither a budget figure nor a schedule was disclosed.

ADNOC's response to Bloomberg was that the story was inaccurate and based on nothing but speculation.

What separates this report from the UAE's current bypass strategy is the third-party element. According to Bloomberg, ADNOC already runs a pipeline from its western onshore fields to Fujairah with capacity of about 2 million barrels a day; in May it said it was quickening the pace on another line, set to be finished in 2027, which would roughly double that figure. The two pipelines are used for ADNOC's own export volumes. A route other shippers could use, by contrast, would establish Fujairah as a regional corridor around Hormuz and extend the UAE's reach beyond its own production.

That would align with the path the UAE has followed since leaving OPEC in May, putting money into pipelines, rail, roads and at least three eastern ports in an effort to rely less on the strait. Neighbouring states are taking much the same approach: Saudi Arabia plans to extend its East-West pipeline, while Kuwait is in discussions with both countries about alternative routes.

The broader picture explains why this matters. At the height of the Iran war, Hormuz was nearly closed; traffic has since picked up, but vessels are still being targeted on a regular basis. Bypass pipelines do not provide immunity either. Fujairah has been hit more than once during the conflict, and Saudi Arabia's East-West pipeline was briefly suspended after a September attack.

Since ADNOC has dismissed the account, the project remains unconfirmed. For oil markets, the firmer reference point is the second pipeline; ADNOC has told some Asian refiners it could offer cargoes at Fujairah from early 2027.