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India Navigates War: UAE Ports Become Energy Lifeline
16 Jul
Summary
- India reroutes energy imports through UAE ports to avoid Strait of Hormuz risks.
- Habshan-Fujairah pipeline and Sohar port offer alternative energy supply routes.
- Iran's threats to alternative routes add new worries for India's energy security.
India's energy supply routes are being significantly reshaped by the ongoing conflict in West Asia. To mitigate risks, the nation's refiners and importers are increasingly relying on the United Arab Emirates' (UAE) ports of Fujairah and Khor Fakkan, located outside the traditional Strait of Hormuz shipping route.
These UAE ports, situated east of the Strait of Hormuz, have become a crucial lifeline for India amidst escalating attacks on commercial shipping. Additionally, India is utilizing the UAE's 406km Habshan-Fujairah strategic oil pipeline as a bypass to the Strait of Hormuz.
Prior to the conflict, approximately 60% of India's crude oil, 54% of its liquefied natural gas (LNG), and 90% of its liquefied petroleum gas (LPG) imports were sourced from West Asia via the Strait of Hormuz. This vital waterway is now considered a high-risk area due to the escalating tensions.
The Sohar port in Oman has also emerged as a significant source for energy commodities for India during this period. Meanwhile, shipments from Saudi Arabia are utilizing its Yanbu port through the Red Sea, bypassing the Strait of Hormuz via the Saudi Aramco's East-West pipeline, although this route proves logistically more expensive due to its length.
These alternative ports in the UAE are also instrumental in routing energy supplies from other regional countries, including LNG from Qatar. Analysts suggest the UAE is considering expanding its terminals in Fujairah to facilitate freight movement, with DP World planning to enhance Fujairah port operations to bypass the Strait of Hormuz.
However, new worries have surfaced. Iran has reportedly threatened to target alternative oil and gas export routes, including the UAE's Fujairah pipeline and the Saudi East-West pipeline, in response to U.S. actions. Furthermore, Indian oil supplies from Russia are under threat from a proposed U.S. bill that could impose significant tariffs on countries importing Russian oil, potentially destabilizing India's energy supply chain.
