Iraq's oil exports through the Strait of Hormuz have plunged by almost 90% after the conflict involving Iran affected the world's most important energy route.
Iraq's Oil Minister Basim Mohammed said Iraq exported only about 10 million barrels of oil through the Strait of Hormuz in April compared to about 93 million barrels a month before the war broke out. Disruptions in the area have also affected oil exports from other Gulf countries including Saudi Arabia, the UAE and Kuwait.
While Iraq remains heavily dependent on Hormuz, the UAE is moving faster to build alternative infrastructure. Abu Dhabi National Oil Company (ADNOC) is currently accelerating the project for a second oil pipeline from Abu Dhabi to Fujairah, which is expected to be completed by 2027.
The project will double the UAE's oil export capacity through Fujairah without having to go through the Strait of Hormuz. Currently, the UAE only has one main pipeline, the Habshan-Fujairah pipeline, which can carry about 1.8 million barrels a day.
Abu Dhabi Crown Prince Sheikh Khaled bin Mohamed bin Zayed Al Nahyan has urged the project to be accelerated to meet rising global energy demand despite the disruption of Gulf exports due to the war.
Earlier this month, the UAE announced its decision to leave OPEC after being a member since 1967. The move is seen as giving Abu Dhabi more freedom to increase oil production without being bound by OPEC production quotas.
Before the conflict, the UAE produced more than three million barrels of oil per day. Abu Dhabi is now targeting a production capacity of up to 4.9 million barrels per day through ADNOC’s massive investment in new oil fields and export infrastructure.
But due to the war and export disruptions, the UAE’s current production is estimated at around 1.8 to 2.1 million barrels per day due to export restrictions and security risks in the Gulf region.
Iraq has tried to compensate for the drop in Hormuz exports by increasing shipments via the Kirkuk–Ceyhan pipeline to the port of Ceyhan in Turkey. Baghdad aims to increase exports via the route from 200,000 barrels to 500,000 barrels per day.
