UAE Pushes Ahead With ‘Zero Hormuz’ Strategy to Diversify Trade Routes

The UAE is making more concerted efforts to lessen the country’s economic and logistical reliance on the Strait of Hormuz following the escalating security worries, which have highlighted the dangers of the critical seaway.

The strategy which has been called the UAE’s “Zero Hormuz” approach, is based on developing alternative energy, shipping and logistics movements. The aim is not to compete with the Strait but to allow trading from the UAE to go on even if such access is hampered.

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Fujairah Emerges as a Strategic Alternative

The facility of UAE ports on the Gulf of Oman, mainly Fujairah, Khor Fakkan and Dibba, will be at the heart of the strategy. However, the presence out of the Strait of Hormuz provides greater flexibility to the UAE to transport energy and commercial goods directly to the world markets.

Fujairah is already a hub city for energy and maritimes. Investing in storage and shipping/export facilities there could ensure sustainable supply chains, and help position the UAE less vulnerable to disruption within the Strait.

Oil Pipelines Enhance Energy Security

A large factor of the plan is the pipeline infrastructure. A current pipeline between the oil-rich UAE’s West and East, the Habshan Fujairah pipeline, already exists to carry crude from the oil-rich UAE’s West by land rather than sea through the Strait.

Further pipeline capacity options would provide greater flexibility. A feasibility study for LNG and refined petroleum products also provides fuel options to help get energy to your destination without using only sea lanes that run through Hormuz.

Etihad Rail Builds a Wider Trade Network

Diversification is a UAE strategy not just for oil. Crates of inter-Arabian transport will be shifted from sea to land via transporting centers like Etihad Rail and other new regional logistics hubs.

Omani ports including Sohar and Duqm might serve as another way to import/export goods to and from the area. These multi modal networks would provide businesses with more options in the event of a maritime disruption.

Why Does Strategy Matters?

The Strait of Hormuz is still one of the world’s significant energy pathways as it is hard to be totally reliant on it. But the less it relies on others, the more resilient the UAE will be in the event of geo-political crises, shipping delays and shocks to supply chains.

The approach might also make UAE-based logistics routes more appealing to international companies as for the energy, industrial and consumer goods logistics networks, it will provide several routes.

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