UAE Emerges Steady as Hormuz Tensions Wind Down

UAE Moments

6 hours ago

After days of rising tensions in the Gulf following US airstrikes on Iranian nuclear sites, both Iran and Israel announced a ceasefire on Tuesday, June 24. This has eased fears of a wider regional conflict and a potential closure of the Strait of Hormuz, a key oil transit route that had been at the center of global concern.
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While Iran's parliament approved the option to block the Strait on June 22, pending approval from its Supreme National Security Council, the truce suggests that this drastic step was unlikely from the start.
Still, regional anxiety was high. The Strait of Hormuz is one of the world's most critical energy chokepoints, with around 20 per cent of global oil, or 17 million barrels per day, passing through it. But experts say that even in a worst-case scenario, the UAE would have remained one of the best-prepared countries in the region to withstand the fallout.
UAE's Oil Flow Is Protected by Smart Infrastructure
Hamza Dweik, Head of Trading at Saxo Bank MENA, noted the immediate economic risks the UAE would face in a closure scenario, including disruptions to oil exports, inflation, and delays in imports.
However, he also pointed to the country's forward-thinking infrastructure. 'The Habshan–Fujairah pipeline allows the UAE to bypass the Strait entirely, sending crude straight to the eastern coast,' he said.
This pipeline can carry up to 1.8 million barrels per day, significantly easing reliance on Hormuz. Ports like Fujairah and Khor Fakkan, which are outside the Strait, also ensure continued shipping access.
Add to that the UAE's liberalised fuel pricing model, government-controlled strategic reserves, and deep sovereign wealth buffers, and the result is a nation that's far better insulated from geopolitical shocks than many of its neighbors.
Imports, AI, and Energy Security: The Next Layer of Risk
Dweik also highlighted how import disruptions would be felt across sectors, from food to construction. "Freight and insurance costs would rise, shipments would be delayed, and inflation could pick up," he explained.
Konstantin Vladimirovich Tserazov, former Senior VP at Otkritie Bank, pointed out that global shipping has already started adjusting routes. 'Ships are taking long detours to avoid the area. This adds cost and time, which eventually hits the consumer,' he said.
He also flagged risks to the UAE's booming AI and tech ambitions. 'Data centres need energy. Most of the UAE's electricity, about 76.5 per cent, is powered by gas. If LNG shipments from Qatar are disrupted due to Hormuz closure, energy shortages could ripple into the digital economy.'
Maritime Resilience and Financial Cushion
Capt. Dilip Goel, who oversees maritime monitoring at AD Ports Group, said a full-scale disruption at Hormuz could impact up to $15 billion in monthly trade connected to the UAE.
'Ports like Jebel Ali and Khalifa could face delays, vessel bunching, and schedule chaos,' he said. 'But Fujairah and other eastern ports outside Hormuz give the UAE a critical edge.'
The country also benefits from substantial financial reserves, over $150 billion in cash and nearly $1.5 trillion in sovereign wealth assets. That gives the UAE flexibility to handle economic shocks, maintain investor confidence, and support key sectors through turbulent periods.
Strategic Foresight Keeps the UAE Steady
Experts agree: while the risk of a Strait of Hormuz closure may have passed for now, the UAE's infrastructure and planning put it in a strong position to weather future storms.
From diversified port access and oil pipelines to strong capital reserves and clear trade policy, the UAE continues to show why it's one of the most stable and prepared economies in the region.
As Goel summed it up: 'This is not just about oil. It's about resilience across the board, in trade, energy, logistics, and security. And the UAE has already done the hard work.'