DOHA, Qatar—Dubai-based DP World said it will develop two new maritime terminals in Fujairah on the United Arab Emirates’ eastern coast, expanding its logistics network in a move that will help reduce the country’s reliance on the Strait of Hormuz.
Event Context
Fujairah, one of the U.A.E.’s seven emirates, is home to the only major U.A.E. port on the Gulf of Oman, outside the Strait of Hormuz. It has taken on greater strategic importance since Iran effectively shut the Strait of Hormuz following the start of its war with the U.S. and its allies on Feb. 28, choking flows through a waterway that normally carries around a fifth of the world’s oil and gas.
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Shipping through Hormuz staged a partial recovery after a ceasefire in mid-June, but traffic has again fallen sharply as U.S.-Iran hostilities intensified earlier this month. Only nine vessels crossed the strait on Tuesday, according to Kpler data cited by The Wall Street Journal.
Persian Gulf states, including the U.A.E. and Saudi Arabia, are pouring billions of dollars into new pipelines, rail corridors and energy storage hubs to bypass the strait in what is set to become one of the most durable outcomes of the war.
The Strait of Hormuz is likely to become far less central to global oil trade by 2030 as Gulf producers invest heavily in alternative export routes, according to consulting firm Eurasia Group.
DP World said the terminals would increase its container-handling capacity in the U.A.E. to nearly 22 million 20-foot equivalent units, or TEUs—the industry’s standard measure of capacity—from 19.4 million. Group Chief Executive Yuvraj Narayan said the facilities would be integrated with the company’s logistics network at Jebel Ali, providing additional capacity as the port continues to operate at high utilization.
DP World’s announcement also comes as Iran-backed Houthi militants in Yemen declared a naval blockade against Saudi Arabia that puts shipments through the kingdom’s Red Sea export route at risk, prompting some tankers and other commercial vessels to reroute.
Write to Farhan Rafid at [email protected] and Giulia Petroni at [email protected]
