Latest news with #GulfTensions
UAE Moments
7 hours ago
- Business
- UAE Moments
UAE Emerges Steady as Hormuz Tensions Wind Down
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. Join our FREE WhatsApp channel to dive into a world of real-time engagement! 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.'
Khaleej Times
11 hours ago
- Business
- Khaleej Times
How UAE is well-positioned for resilience as Hormuz tensions recede
After days of escalating Gulf tensions following US strikes on Iranian nuclear sites, both Iran and Israel announced a ceasefire early today, easing fears of a full-fledged closure of the Strait of Hormuz. While Tehran's parliament had approved the option to block the vital waterway on June 22, pending approval by its Supreme National Security Council the recent truce and Iran's restraint signal that this dramatic move was never likely. But experts now say the UAE was never truly in the line of fire, and even if the worst had materialised, the country is among the best positioned in the region to absorb the shock. 'The recent US airstrikes on Iranian nuclear sites have dramatically heightened geopolitical tensions in the Gulf, placing the Strait of Hormuz, a critical maritime chokepoint, at the centre of global economic concern. Roughly 20 per cent of the world's daily oil supply, or about 17 million barrels per day, passes through this narrow waterway,' said Hamza Dweik, Head of Trading at Saxo Bank Mena. 'For the UAE, a temporary closure of the Strait would have immediate and multifaceted economic consequences, particularly in the areas of oil exports, imports, and inflation,' he added. However, analysts point out that the UAE's exposure is cushioned by both infrastructure and policy foresight. A major portion of its oil exports can bypass the Strait via the Habshan–Fujairah pipeline, which runs directly to the eastern seaboard. Ports like Fujairah and Khor Fakkan also lie outside the Strait, ensuring continued access to international shipping lanes. Combined with the country's liberalised fuel pricing model, strategic stockpiles, and sovereign wealth buffers, these factors greatly reduce the impact of short-term disruptions. The UAE exports around 3.5 million barrels of oil per day, with a significant portion transiting through the strait. While the Habshan–Fujairah pipeline offers an alternate route capable of transporting up to 1.8 million barrels a day, it doesn't fully offset the volume typically passing through Hormuz. 'On the import side, the UAE relies heavily on maritime routes for essential goods, including food, machinery, and construction materials. Disruptions would likely increase freight and insurance costs, delay shipments, and contribute to imported inflation,' Dweik said. Konstantin Vladimirovich Tserazov, former Senior Vice President at Otkritie Bank, noted that global shipping had already started adjusting in anticipation of conflict. 'Right now, ships are already avoiding the area. MarineTraffic data shows vessels taking long detours, adding days to voyages. The UAE imports 90 per cent of its food and consumer goods by sea. Longer shipping routes mean higher costs—and those get passed to consumers.' 'With Dubai's financial hub deeply tied to trade, foreign investors might pull back, hurting capital flows just as the UAE pushes its non-oil growth,' he added. Tserazov also flagged a less obvious risk: energy supply to power-hungry sectors like AI and data infrastructure. 'Data centres guzzle power, and that's a problem. The UAE is betting big on AI, expecting it to contribute 14 per cent to GDP by 2030. But AI needs data centres, and data centres need massive energy. Gas fuels 76.5 per cent of the UAE's electricity… If Hormuz closes, LNG shipments from Qatar (which also transit the strait) get cut off. Suddenly, keeping servers online competes with cooling homes and running factories.' Despite these risks, maritime experts say the UAE was already positioned for resilience. 'A closure or escalation in the Strait of Hormuz would significantly disrupt maritime operations connected to the UAE, with consequences spanning trade, logistics, insurance, and security,' said Capt. Dilip Goel, who leads unified maritime asset monitoring and control at AD Ports Group. 'Any disruption could affect up to $10–15 billion in monthly trade flows, depending on the severity and duration. UAE ports like Jebel Ali, Khalifa, and Mina Rashid… would see schedule disruptions, vessel bunching, and cascading delays across container, tanker, and bulk traffic.' Ports outside the strait, including Fujairah, the world's second-largest bunkering port, act as vital alternatives. Meanwhile, the UAE's strong financial position, with over $150 billion in reserves and nearly $1.5 trillion in sovereign wealth fund assets, offers enough cushion for short-term shocks. 'In short, while the UAE is better positioned than many Gulf nations to absorb and reroute, a prolonged closure of Hormuz would not just delay cargo, it would test the region's entire maritime security architecture, logistics resilience, and commercial adaptability,' Goel said. While the danger appears to have passed for now, experts agree the UAE's strategic foresight, from energy pipelines and diversified ports to strong capital reserves, will continue to offer a reliable shield against regional volatility.
Al Arabiya
3 days ago
- Politics
- Al Arabiya
Leaders in the Gulf region react to US attack on Iran
The reaction of world leaders in the Gulf region after US forces struck three Iranian nuclear sites on Sunday. Qatar Qatar's foreign ministry said on X that 'dangerous tensions' following US strikes on Iran would lead to 'catastrophic repercussions' on both regional and international levels. Oman Oman, which was mediating nuclear talks between Washington and Tehran, on Sunday strongly condemned US strikes on nuclear sites in Iran. The Gulf sultanate 'expresses deep concern, denunciation and condemnation of the escalation resulting from the direct air strikes launched by the United States on sites in the Islamic Republic of Iran,' the official Oman News Agency said.
