UAE Proposes New Pipeline Amid Trump's War Frustration

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Written by Daniel Graeber for IIR News Intelligence (Sugar Land, Texas)

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Summary

Trump said he's losing patience with the conflict in Iran. The United Arab Emirates, meanwhile, is proposing a new crude oil pipeline to bypass the Strait of Hormuz.

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Trump Jump for Crude Oil

Crude oil prices jumped Friday after U.S. President Donald Trump left Beijing with few breakthroughs while expressing frustration with the conflict in Iran.

Conflict simmering since the end of February is roiling global energy markets and the economy. The International Energy Agency said this week the supply-shock stemming from the tacit closure of the Strait of Hormuz was unprecedented, while Industrial Info Resources data continue to show the regional impacts to everything from refineries such as Saudi Aramco's Ras Tanura Refinery, to QatarEnergy halting production of liquefied natural gas due to drone strikes on its infrastructure.

For more information on Ras Tanura, the Industrial Info Resources Global Market Intelligence (GMI) Oil & Gas Plant Database offer details--including capacities, related projects and necessary equipment--in a plant profile.

End-of-April signs of breakthroughs in Pakistani-mediated peace efforts have evolved into renewed frustration from U.S. President Donald Trump during meetings with Chinese President Xi Jinping.

"I am not going to be much more patient," Trump said of Iran in an interview on the "Hannity" program on Fox News Thursday. "They should make a deal."

Trump tore up a previous agreement limiting Iran's nuclear program during his first term in office, while Beijing said the war should never have happened. By Friday morning, the price for Brent crude oil, the global benchmark, was up nearly 2.5% to trade near $108 per barrel. The price averaged $100.32 in April and $91.38 in March.

The conflict is taking a toll on the economy. In the U.S. economy, the world's largest, inflation to April was the highest in three years, while average hourly earnings declined, the Bureau of Labor Statistics reported this week.

By the Numbers

• 1.5 million bpd already from UAE land pipeline
• 18% increase in oil prices since March

Early Sings of Relief?

There could be some tentative signs of movement through the Persian Gulf, however. Early this week, a vessel was seized in the waters of the United Arab Emirates (UAE) and transferred to Iran.

But by Friday, the Bloomberg news service reported that global commodity trader Vitol was offering cargoes of heavy Iraqi crude for ship-to-ship transfers off the UAE coast. Iraqi flows had been essentially shut-in because of the lack of safe transit out of the Persian Gulf.

To that end, the United Arab Emirates is pressing for a new crude oil pipeline, dubbed West-East. The emirates can already ship about 1.5 million bpd through the Habshan - Fujairah Crude Oil Pipeline (ADCOP), though Abu Dhabi Crown Prince Khaled bin Mohamed bin Zayed al-Nahyan said he wanted the Abu Dhabi National Oil Company (ADNOC) to accelerate development of the new project. Readers can learn more from a pipeline profile.

"The pipeline is currently under construction and is expected to become operational in 2027," the official Abu Dhabi Media Office said. "His Highness directed ADNOC to accelerate delivery of the project, as the company moves forward into a new phase of world-scale project execution to meet global energy demand."

Another pipeline, the Saudi East/West crude oil pipeline is running at its full rate of about 7 million bpd, avoiding the Strait of Hormuz. Readers can learn more from a pipeline profile.

Industrial Info Resources is tracking 123 crude oil-pipeline projects across the Middle East, totaling more than US$9 billion of investment. For more information, readers can consult a list of detailed project reports.

Key Takeaways

• Middle East conflict not headed in Trump's direction
• United Arab Emirates proposes new oil pipeline

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About Industrial Info Resources
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news, and analysis on the industrial process, manufacturing, and energy-related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified, and verified plant and project opportunities. Across the world, Industrial Info Resources is tracking over 250,000 current and future projects worth $30.2 trillion (USD).