Industry analysts now agree that the UAE was never at serious risk. Even if the situation had escalated, the country remains one of the most resilient in the region—well-equipped to handle potential disruptions.
Ceasefire Eases Gulf Tensions; Strait of Hormuz Remains Open
After several tense days in the Gulf following U.S. strikes on Iranian nuclear facilities, both Iran and Israel declared a ceasefire on Tuesday, June 24. This move has helped ease concerns over a potential shutdown of the vital Strait of Hormuz—a key route for global fuel and material shipments.
Although Iran’s parliament had backed a proposal to block the waterway on June 22 (pending final Security Council approval), the recent truce and Iran’s decision to hold back suggest that such drastic action was unlikely from the start.
Industry experts now confirm that the UAE was never in direct danger. Even in a worst-case scenario, the country remains among the most stable and strategically equipped in the region to handle supply chain shocks and operational disruptions.
“The recent U.S. airstrikes on Iranian nuclear sites have sharply escalated tensions in the Gulf, putting the Strait of Hormuz—a vital trade and energy route—under the global spotlight,” said Hamza Dweik, Head of Trading at Saxo Bank MENA. “About 20% of the world’s daily oil supply—roughly 17 million barrels—flows through this narrow passage.”
Dweik noted that any temporary closure of the Strait would immediately affect the UAE’s economy, especially in terms of oil exports, imports, and inflation. These pressures could ripple across fuel costs, shipping, and supply chains—critical areas for construction, demolition, and heavy industry operations.
Still, the UAE is well-positioned to manage such risks. Thanks to strong infrastructure and forward-thinking policies, a large share of the country’s oil exports can be routed through the Habshan–Fujairah pipeline, which avoids the Strait entirely. Major ports like Fujairah and Khor Fakkan also operate outside the chokepoint, keeping vital trade lanes open.
Backed by a liberalized fuel pricing model, strategic reserves, and robust financial buffers, the UAE’s resilience helps ensure business continuity—even during regional instability.
UAE Oil Flows & Imports at Risk—But Infrastructure Keeps Pressure in Check
The UAE exports approximately 3.5 million barrels of oil per day, much of which passes through the Strait of Hormuz. While the Habshan–Fujairah pipeline provides an alternative route for up to 1.8 million barrels daily, it can’t fully replace the volume typically shipped through Hormuz.
On the import side, the UAE relies heavily on maritime routes for essential supplies, including food, machinery, construction materials, and industrial equipment. “Any disruption would spike freight and insurance costs, delay shipments, and push up prices due to imported inflation,” said Hamza Dweik, Head of Trading at Saxo Bank MENA.
With global shipping already adjusting to rising tensions, Konstantin Tserazov, a former Senior VP at Otkritie Bank, noted that ships are taking longer and costlier detours. “The UAE brings in 90% of its food and consumer goods by sea. Delays mean rising logistics costs—which eventually hit end users, including contractors, builders, and industry buyers.”
Tserazov also flagged deeper concerns: power supply disruptions. “AI infrastructure and data centers are energy-intensive. The UAE aims for AI to contribute 14% of GDP by 2030, but powering these facilities requires reliable energy.
Natural gas fuels 76.5% of the country’s electricity, and LNG from Qatar—which also uses the Strait—could be cut off during any closure. That means power competition between tech, homes, and industries.”
Maritime experts, however, remain cautiously optimistic. “A full closure or escalation in the Strait of Hormuz could disrupt up to $10–15 billion in monthly trade, impacting not just oil exports but container schedules, bulk shipments, and port operations across the UAE,” said Capt Dilip Goel, a seasoned maritime analyst.
Ports outside the Strait, like Fujairah (the world’s second-largest bunkering port), provide key relief routes. Meanwhile, top-tier infrastructure and financial buffers—including over $150 billion in foreign reserves and close to $1.5 trillion in sovereign wealth assets—offer significant protection against short-term volatility.
“In short,” Goel added, “the UAE is better prepared than most regional players. But if Hormuz stays shut for long, it won’t just delay cargo—it’ll pressure the entire logistics chain, energy mix, and regional trade resilience.”
For now, with tensions easing, the immediate risk has cooled. Still, the UAE’s strategic planning—diversified ports, alternate pipelines, and deep capital reserves—remains its strongest defense against future shocks.
Editor-at-Large
A passionate writer in the lubricant industry, Awais Iqbal has been covering oils, greases, and industrial fluids since the start of his career. At 25, he’s already written for blogs, catalogs, and brand guides across the UAE. Awais’s insights help companies connect with their audience, and his clear, helpful writing style is trusted by brands in the region.
