UAE accelerates switch to ‘zero Hormuz’ shipping routes

• Aims to nullify US-Iran war disruption
• Expansion of ports on east coast
• Calculated to reassure global markets

The UAE is accelerating plans to route more trade away from the disrupted Strait of Hormuz, as Gulf ports risk losing market share to rivals in India, Sri Lanka and beyond.

The US-Iran war has dented the UAE’s distribution business and exposed the risks of relying on Hormuz.

UAE officials have talked about a “zero Hormuz” future that protects the flow of commodities and goods regardless of whether the waterway is open.

New and revamped energy pipelines, road and rail networks, and the expansion of the Fujairah and Khor Fakkan ports on the Gulf of Oman form part of this plan.

Jebel Ali, Khalifa and other ports locked inside the strait will have to rely on sheer heft to survive – and deepen their broader supply-chain operations, analysts have said.

“The biggest UAE ports are unlikely to require a fundamental reinvention as their competitive strengths today extend well beyond their geographic location,” said Nishal Sooredoo, associate director of Ocean Shipping Consultants, a subsidiary of Netherlands-based Haskoning.

“They have developed into integrated logistics and industrial ecosystems combining ports, free zones, manufacturing, warehousing, distribution and value-added logistics services.”

Jebel Ali handled the equivalent of 15.5 million twenty-foot containers, or TEUs, in 2024, becoming the world’s ninth largest container port, according to the World Shipping Council.

AD Ports Group runs 10 ports on the UAE’s Gulf coast, including the deep-water facilities of Khalifa. Nearly 5.5 million TEUs moved through it in 2024.

These numbers make them irreplaceable considering that Khor Fakkan on the east coast has an annual capacity of 5 million TEUs and has never processed more than 3 million.

That port handled about 8,000 containers a week before the crisis, jumping to 65,000, according to group chief executive Farid Belbouab of UAE logistics company Gulftainer.

Fujairah can handle upwards of 720,000 TEUs annually.

Oman’s Duqm, Sohar and Salalah ports can handle, combined, up to 7 million TEUs, according to Afaq Hussain, director of the India-based Bureau of Research on Industry and Economic Fundamentals.

“The capacities are no match,” said Hussain.

The UAE’s Jebel Ali port is also a major transshipment hub. So when Emirati officials talk about “zero Hormuz”, they are reassuring global markets they have a Plan B for the long haul rather than describing immediate changes, Hussain said.

The concerns are justified. The war caused containers moving through Jebel Ali to drop from 40,000 to 1,000 daily, according to the Wall Street Journal.

Fears that the peace talks will fail – heightened by the latest eruption of violence and President Donald Trump saying the ceasefire is over – are weighing on the resumption of traffic through Hormuz.

Some transits resumed after the interim US-Iran peace deal came into effect last month, but their numbers were only about a third of what they were before the war, according to industry platform Kpler.

Meanwhile, competitors such as the deep-water ports of Colombo in Sri Lanka and Vizhinjam in southern India are eyeing fresh market share.

“The whole world is waiting to grab these opportunities,” said Hussain.

DP World and AD Ports should expand road and rail links to Arabian and Red Sea ports, and maritime facilities in Fujairah and Khor Fakkan, to convey to energy and shipping companies that alternatives are in place, he said.

This would help restore confidence even if the build-out takes years and Jebel Ali and Khalifa remain the preferred options, Hussain added.

Further reading:

• Iran’s vessel attacks push Hormuz traffic north
• Oman and Iran advance rival plans for Hormuz shipping
• Oil jumps after Trump says Iran ceasefire deal is ‘over’

“Plan A is always a maritime leg,” said Hussain. He pointed to how a single vessel can ferry upwards of 10,000 containers, which would otherwise need 10,000 trucks or 100 trains.

Energy exports in particular cannot do without shipping, according to analysts.

Even expanded crude pipelines will not be a match for tankers for the foreseeable future and liquefied natural gas cannot be moved through pipelines.

Sooredoo said Gulf ports might handle fewer containers daily, but the decrease would not be drastic and the industrial, free-trade-zone and logistic services would compensate for it.

“Jebel Ali and Khalifa have invested heavily in that integration with the free zone, with the rail and road connection, distribution centres and everything that forms the supply chain,” Sooredoo said. “They have a first-mover advantage.”

Jebel Ali Free Zone logged $190 billion in trade from May 2024 to May 2025, a 15 percent year-on-year increase and the most it has contributed to the Dubai economy.