For oil, the report offers a medium-term offset to Hormuz risk rather than near-term relief, since no new bypass capacity arrives before early 2027. Until then, Gulf supply remains exposed to any renewed escalation, so the war-risk premium is unlikely to ease on this news alone. Once running, a second outlet to Fujairah would make more of the UAE’s medium sour crude secure for Asian buyers, which could narrow risk premiums on Gulf grades bought on term contracts. The bigger exposure remains with Gulf producers that lack comparable bypass routes, so a firm start date for Adnoc alone does not change the overall supply picture much.
Adnoc is building its way around Hormuz, but the new exit doesn’t open until early 2027, leaving the market to live with the strait for a while yet.
Summary:
Adnoc told some Asian refiners it may start supplying Upper Zakum crude from Fujairah in early 2027, Bloomberg reported
The crude would move via the new West-East 1 pipeline, bypassing the disrupted Strait of Hormuz
Adnoc said in May it was accelerating construction, and its CEO said the line was nearly 50% complete
The pipeline is expected to double Adnoc’s export capacity through Fujairah
The existing Habshan-Fujairah pipeline carries up to 1.8 million barrels a day
The UAE left OPEC with effect from May 1 and targets 5 million barrels a day of production capacity by 2027
Abu Dhabi National Oil Co. has told some Asian refiners that part of their crude supply from its offshore fields is likely to be delivered through a new pipeline that bypasses the Strait of Hormuz from early next year, Bloomberg reported, citing people familiar with the matter.
According to the report, Adnoc has indicated it may begin supplying some Upper Zakum crude to term customers from the Fujairah terminal in the first months of 2027. Upper Zakum is produced from fields inside the Persian Gulf, meaning its exports would normally have to pass through Hormuz, where shipping has been disrupted by the Iran war. The guidance is the most specific timeline yet for the project. Adnoc said in May that it was speeding up construction and that the pipeline would be ready next year, but gave no further detail.
The line, known as West-East 1, was fast-tracked in May. Adnoc Chief Executive Sultan Al Jaber said later that month that it was nearly half complete and that, once operational, it would double the company’s export capacity through Fujairah, which sits on the Gulf of Oman outside the strait. The UAE’s existing Habshan-Fujairah pipeline can already carry up to 1.8 million barrels a day.
The project is part of a broader effort by the UAE to protect its exports while Hormuz remains contested. The country, which left OPEC with effect from May 1, has been targeting crude production capacity of 5 million barrels a day by 2027.
The timeline matters for Asian buyers in particular, as they rely heavily on Gulf crude that must currently either transit the strait or compete for limited capacity on the existing bypass route. A second outlet would give Adnoc’s term customers a more reliable supply channel, although it would not remove the wider risk to the large volumes from other Gulf producers that have no comparable alternative.
Whether the start-up arrives on time, and how quickly flows ramp up, will be key for gauging how much Gulf supply can be insulated from any renewed escalation.
This article was written by Eamonn Sheridan at investinglive.com.
