Middle East seeks bypass routes for oil and expands local manufacturing

what happened

A Zawya opinion piece, published by Reuters, argues that disruption around the Strait of Hormuz is reshaping how Middle Eastern countries move energy. The UAE is accelerating the West East crude pipeline expansion toward Fujairah, Saudi Arabia is reviewing capacity on its line to Yanbu on the Red Sea, and Iraq is studying export routes to the Mediterranean and Türkiye.

The UAE left OPEC and OPEC+ effective 1 May 2026, which gives it more room to manage production. State company ADNOC targets crude capacity of 5 million barrels per day by 2027, up from about 4.85 million today. It has also announced more than AED60 billion of local manufacturing opportunities through 2030.

why it matters

For oil markets, two points matter: reduced reliance on the Strait of Hormuz for exports and the UAE's higher output ambitions after leaving OPEC+. New routes and capacity could shift future supply balances, though these projects take years to complete.

market impact

Oil: new bypass routes and UAE output growth could add supply over time, weighing on prices

• ▼Brent pressure down — UAE capacity growth and bypass routes raise future supply, though the effect is delayed

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