Abu Dhabi is reshaping the Middle East's energy export landscape with unprecedented force and speed.
The sovereign fund L'imad Holding, led by Abu Dhabi Crown Prince Sheikh Khaled bin Mohamed Al Nahyan, is spearheading a strategy officially named "Zero Hormuz." The core objective is to transform the Port of Fujairah — located on the Gulf of Oman and completely bypassing the Strait of Hormuz — into a new oil export hub. L'imad plans to invest tens of billions of dollars in new port infrastructure outside the strait and has already partnered with BlackRock's Global Infrastructure Partners, Temasek, and Abu Dhabi National Oil Company to jointly target up to $30 billion in infrastructure investment.
Goldman Sachs' commodities team has provided quantitative support for this strategy: as regional pipeline capacity continues to expand, by the end of 2027, more than 45% of the Persian Gulf's pre-war export volumes will be able to bypass Hormuz; by the end of 2028, that proportion will exceed 60%. This means the strategic leverage Iran has wielded over Gulf energy exports through the Strait of Hormuz for decades is being systematically dismantled.
UAE Trade Minister Thani Al Zeyoudi stated unequivocally in June this year that regardless of whether the Strait of Hormuz remains open, the UAE will achieve "zero dependence" on the strait. This declaration marks a structural shift in the Gulf region's energy export landscape — no longer an emergency contingency plan, but a long-term strategy.
Tens of billions of dollars pouring into Fujairah
L'imad Holding is the core operator behind this strategy. The fund manages approximately $300 billion in assets. Sheikh Khaled took the helm of the fund weeks before the outbreak of the Iran conflict and simultaneously serves as chairman of ADNOC's board executive committee.
On specific deployment, L'imad has announced plans to privatize Abu Dhabi Ports Co. at a valuation of nearly $9 billion. People familiar with the matter revealed that the fund will subsequently invest additional tens of billions of dollars in new port infrastructure outside the strait, with Fujairah as the primary focus.
In May this year, L'imad signed an agreement with BlackRock's Global Infrastructure Partners, Temasek, and ADNOC to jointly target up to $30 billion in energy transportation, logistics, and water infrastructure investment. Abu Dhabi chose to bring in external capital to participate alongside rather than relying entirely on state funding. BlackRock has effectively secured a "toll road" that bypasses Iran.
Meanwhile, ADNOC is building a second oil pipeline to Fujairah to double export capacity through the port. Sheikh Khaled explicitly demanded accelerated progress at a meeting in May. DP World is also independently advancing a new container terminal project in Fujairah. This means the relatively narrow stretch of coastline at the foot of the Hajar Mountains is about to become the most crowded and most valuable strategic real estate in the Gulf region.
Goldman Sachs estimates: 60% of exports can bypass Hormuz by end of 2028
In a research report published in July, Goldman Sachs' commodities team conducted a systematic assessment of the pace and scale of regional pipeline expansion.
Goldman Sachs defines current effective bypass capacity as the combined flows of Yanbu (East-West Pipeline), Fujairah (ADCOP pipeline), and Ceyhan (Kirkuk-Ceyhan pipeline). Under the base case scenario, this capacity will add 3.8 million barrels per day by the end of 2027, and cumulatively add 7.3 million barrels per day by the end of 2028, bringing total capacity to over 14 million barrels per day — while the pre-war export volume of the seven Gulf oil-producing countries that need pipelines to bypass Hormuz was approximately 23 million barrels per day.
The UAE occupies a prominent position within this: ADNOC's second pipeline to Fujairah (the West-East Pipeline) is one of only two projects that have already broken ground; the Habshan-Fujairah pipeline has been included in Goldman Sachs' "accelerated scenario" — if that scenario materializes, the bypassable export ratio could reach 75% by the end of 2028, far above the 45% under the "conservative scenario" and 60% under the base case.
Goldman Sachs also cited historical data noting that the median construction period for Middle East pipelines is 2.5 years, with single-country-led projects advancing faster, especially under supply disruption pressure. The total construction cost of the seven projects is estimated at between $30 billion and $48 billion — broadly consistent with the investment scale of the joint platform between BlackRock and L'imad.
Regarding oil price impact, Goldman Sachs raised its long-term Brent crude assumption (3-year forward) by $9 to $76 per barrel during the peak of the conflict, primarily reflecting a higher structural security premium. However, the bank also warned that continued expansion of bypass capacity will pose downside risks to this long-term assumption — every barrel Sheikh Khaled directs to Fujairah correspondingly reduces the risk premium Iran can charge global markets.
Fujairah already operating under strain
Even before infrastructure investment has been fully deployed, Fujairah is already handling throughput far exceeding its designed capacity.
According to Goldman Sachs data from late September, combined crude oil, refined products, and LPG flowing through Fujairah reached 3.6 million barrels per day, surpassing Yanbu's 2.6 million barrels per day and more than double the pre-war level of approximately 1.7 million barrels per day.
By country, the UAE's export volume has reached 110% of its 2025 average, second only to Saudi Arabia, while Iran's seaborne crude exports in September were nearly zero. After the UAE withdrew from OPEC during the conflict, ADNOC's crude production hit a record high of 4.1 million barrels per day in June and has continued loading export cargoes at Fujairah and Sohar.
Goldman Sachs estimates that over the past week, Persian Gulf oil exports (including "dark fleet exports") have recovered to 23.3 million barrels per day, in line with the 2025 average and double the month-on-month level in September. Crude oil contributed nearly 90% of the recovery, reaching 19 million barrels per day, equivalent to 108% of the 2025 average.
Bypassing the strait, but not the drones
However, Fujairah is not a safe harbor. The port is approximately 80 miles from the Strait of Hormuz, entirely within range of Iranian drones and short-range missiles.
Professor Steffen Hertog of the London School of Economics pointed out this risk in a Bloomberg report. In fact, Fujairah has been struck multiple times during the conflict: on March 14, the port was engulfed in flames, suffering at least seven attacks in the first month of the war; on March 31, Iran explicitly threatened to strike the port and its pipeline to block the UAE's bypass route; on May 4, an Iranian strike on Fujairah's petroleum zone briefly pushed Brent crude above $114 per barrel.
Saudi Arabia's experience provides a cautionary tale. The kingdom's East-West Pipeline with 7 million barrels per day capacity — the largest Hormuz bypass route in the region — was forced to shut down on September 11 following a drone attack by Iran-aligned militia and did not resume operations until September 28. Goldman Sachs' oil tracking report from September 14 noted that an April attack on the same pipeline had reduced flows by 700,000 barrels per day for four days; the latest attack was more intense, threatening the remaining approximately 2 million barrels per day of Yanbu exports. Saudi Arabia was subsequently forced to reroute exports back through Hormuz.
Sanam Vakil of Chatham House noted that the "Zero Hormuz" policy has become an urgent priority for the UAE, but as Iranian proxy forces extend their strike range beyond the strait, Abu Dhabi must also prepare for attacks on infrastructure outside the strait. The next major expenditure item in L'imad's budget is likely to be air defense systems.
Hormuz's strategic value is being reassessed
There are clear divergences in assessments regarding Hormuz's future status. US Treasury Secretary Bessent predicted on September 1 that in two years, Hormuz will become "a worthless body of water"; Qatar's Energy Minister immediately rebutted this as "completely wrong" — which is not difficult to understand, as Qatar has no geographic alternative export route and has already watched its natural gas revenues shrink substantially.
Reality may lie somewhere in between: Hormuz will not become worthless, but if Goldman Sachs' projections materialize, its value to Iran will be greatly diminished, while its value to those who possess ports on the other side of the Hajar Mountains will rise significantly.
For investors, the implications of this structural shift are already clear: the Gulf region's most strategically valuable real estate is migrating from inside the strait to the coast of the Gulf of Oman — and the Crown Prince of Abu Dhabi has already placed a heavy bet on this judgment with tens of billions of dollars and BlackRock's capital.
Comments