A Dubai-based logistics giant announced a deal on Wednesday to develop a new port system that would bypass the Strait of Hormuz, a vital waterway for global oil and gas shipments where the war in Iran has throttled traffic.
The development would create two new shipping terminals off the country’s east coast for container and cargo ships, increasing the company’s container capacity by roughly 13 percent, according to the firm, DP World. That would expand shipping infrastructure in Fujairah, an Indian Ocean port city that serves as a way of bypassing the strait.
DP World is owned by the government of Dubai, part of the United Arab Emirates. Through a vast network of ports and terminals around the world, the firm handles about 10 percent of global container traffic annually. The new terminals would reduce its dependence on Jebel Ali, a flagship piece of Emirati infrastructure on the Persian Gulf and the Middle East’s busiest seaport, where activity has plummeted during the war.
The chairman of Fujairah Ports Authority, Sheikh Saleh Bin Mohammed Al Sharqi, described the project as an “important milestone” in Fujairah’s development as “one of the region’s most important maritime gateways.”
The Emirati effort to diversify supply chains reflects a market rattled by renewed attacks on vessels in the region, where Iran and the United States have jostled for control of the waters with two competing blockades. While before the war, more than 100 ships a day routinely passed through the strait, daily crossing numbers have fallen to double-digits or lower in recent days amid the fighting.
The disruptions caused by attacks — or even just the risk of them — during the conflict have prompted countries to seek alternative routes to move millions of barrels of oil. Yet even those options may narrow further now that the Iranian-backed Houthi militia, which controls a significant part of Yemen, has declared a maritime blockade on Saudi Arabia in the Red Sea.
The Emirates — a country that built its economy around trade, logistics, and finance — has borne the brunt of Iran’s attacks during the war and the economic ripples have been felt across key industries. With Dubai’s main port stranded on the western edge of the Strait of Hormuz, the country has been forced to look for long-term workarounds to the trade routes that once made the emirate so efficient.
The project announced on Wednesday would be located on the UAE’s other coastline, on the Gulf of Oman. The deal covers construction of the Al Rugaylat container and multipurpose terminal and the Dibba General Cargo terminal on the Gulf of Oman. The project would be developed in phases, the company said, with construction expected to take approximately 24 to 30 months.
The company declined to say the cost of the project.
The new port deal comes in the wake of a significant leadership shuffle at DP World in February, after Sultan Ahmed bin Sulayem, the company’s former head, resigned amid mounting scrutiny of his ties to the convicted sex offender Jeffrey Epstein. He was widely credited with transforming DP World from a regional ports and terminals operator into a global logistics powerhouse.
The focus of the war in the Middle East has narrowed into a fight over the strait, through which roughly a quarter of the world’s seaborne crude oil and a fifth of the world’s liquefied natural gas passed before the war. Iran has proved it can effectively control traffic with threats of strikes and, in doing so, gained powerful leverage over global markets.
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