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UAE Moments
25-06-2025
- 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
25-06-2025
- 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.
Khaleej Times
17-06-2025
- Business
- Khaleej Times
US Federal Reserve widely expected to hold interest rates
The US Federal Reserve is expected to hold rates steady on Wednesday, maintaining the federal funds target range at 4.25 per cent to 4.5 per cent. According to the CME FedWatch Tool, there is a 99.8 per cent implied probability that the Fed will stay on pause this week, reinforcing consensus around a cautious, data-dependent policy stance. The UAE Central Bank is also likely to follow suit, maintaining its overnight deposit facility (ODF) at 4.40 per cent. The UAE follows US monetary as the UAE dirham is pegged to the US dollar. For the UAE, a pause in rate changes means local borrowing costs will likely remain unchanged in the near term. 'This stability supports ongoing economic momentum in the Emirates, particularly in sectors like real estate and tourism, which benefit from predictable financing conditions. However, businesses and consumers should remain attentive to future Fed signals, as any shift in US policy will directly influence monetary conditions in the UAE,' said Hamza Dweik, Head of Trading, Saxo Bank Mena. This decision comes amid a backdrop of mixed economic signals. Inflation, while slightly up in May at 2.4 per cent compared to April's 2.3 per cent, remains within a manageable range. The labour market, though showing signs of cooling with slower job growth, continues to demonstrate resilience. These indicators suggest that the Fed sees no immediate need to adjust its policy stance. While no move is anticipated in this meeting, financial markets are increasingly pricing in the first rate cut by September. Bond futures traders see about a 66 per cent chance of a cut happening then, according to data from the CME FedWatch Tool, while they see a 94 per cent chance that the Fed cuts at least twice by year-end. 'The shift in expectations reflects growing confidence that inflation is cooling sustainably alongside a resilient but moderating labour market,' Vijay Valecha, Chief Investment Officer, Century Financial, told Khaleej Times. Right now, monthly government data shows that inflation is cooling while the labour market remains relatively healthy. The CPI report released last week showed slower price growth than economists expected in May, and May employment data showed healthy job creation in the US economy. 'Chair Powell is expected to reiterate the Fed's wait-and-see approach, emphasizing the need for sustained evidence of easing inflation and ensuring policy remains restrictive enough to bring inflation to target without derailing the labour market,' Valecha said. The upcoming meeting will primarily be about the Fed's revised economic projections and the dot plot, which will be updated for the first time since March. It could offer forward guidance on the number and timing of potential cuts in 2025. In March, the median dot still reflected two cuts for this year, but the last set of projections was released before Trump's market-moving tariff announcement on April 2. At the time, the FOMC was expecting two rate cuts in 2025. Since then, sticky inflation, the shock of tariff hikes, and other potential changes in policy and regulation from the Trump administration have upended the outlook. Market participants are watching to see whether that median will slip to one or be affirmed to two, quarter‑point moves. 'Markets will be closely analysing the tone of the press conference, changes to the dot plot, and commentary around the inflation trajectory, tariffs, and labour market resilience for clues on the likely pace of easing ahead,' Valecha said.
Hi Dubai
12-03-2025
- Business
- Hi Dubai
UAE's Dh128 Billion FDI Plan to Create Thousands of Jobs Across Key Sectors
The UAE's ambitious plan to attract Dh128 billion in foreign direct investment (FDI) over the next six years is set to generate thousands of jobs across manufacturing, technology, finance, healthcare, logistics, renewable energy, hospitality, and retail. Key Sectors Driving Employment Growth With the National Investment Strategy 2031 approved by the UAE Cabinet, the country aims to more than double its annual FDI inflows from Dh112 billion in 2023 to Dh240 billion by 2031. This expansion will create demand for skilled professionals in high-growth sectors: Technology & IT : AI, cybersecurity, software development, cloud computing, and digital transformation. : AI, cybersecurity, software development, cloud computing, and digital transformation. Manufacturing & Industrial Innovation : Engineers, technicians, supply chain professionals, 3D printing, and automation specialists. : Engineers, technicians, supply chain professionals, 3D printing, and automation specialists. Financial Services & Fintech : Digital banking, wealth management, credit risk analysis, and investment specialists. : Digital banking, wealth management, credit risk analysis, and investment specialists. Logistics & Transport : Skilled workforce for supply chain, warehousing, and operations. : Skilled workforce for supply chain, warehousing, and operations. Renewable Energy & Sustainability: Researchers and engineers in green energy projects. Expanding Job Opportunities Experts emphasize that large-scale infrastructure projects and an expanding digital economy will create direct and indirect job opportunities across industries. Increased investment in manufacturing will boost related sectors like construction and infrastructure, while technology-driven advancements will spur demand for specialized talent. Hamza Dweik, Head of Trading & Pricing at Saxo Bank MENA, stated that rising business activity will drive employment growth across multiple sectors, benefiting both local and global professionals seeking opportunities in the UAE's expanding economy. A Shift Toward a Knowledge-Based Economy Hassan Fawaz, Chairman of GivTrade, highlighted that the UAE's strategy fosters long-term career prospects in emerging industries, reducing reliance on traditional sectors. Meanwhile, Vijay Valecha, Chief Investment Officer at Century Financial, pointed out that increased FDI will encourage entrepreneurship, attracting a skilled workforce and bolstering the UAE's position as a global investment hub. With a focus on economic diversification beyond oil, the UAE's FDI-driven job creation will accelerate the transition toward a resilient, knowledge-based economy, positioning the nation as a leader in global business and innovation. News Source: Khaleej Times
