India eyes UAE ports to skirt Hormuz risks for energy cargoes
Indian refiners and importers have increasingly sourced energy cargoes through the United Arab Emirates' Fujairah and Khor Fakkan ports, located on the Gulf of Oman outside the Strait of Hormuz
This shift follows continuing disruption around the Strait of Hormuz since the outbreak of conflict involving Iran in early 2026, which has periodically threatened tanker transit through the strait
The UAE has accelerated pipeline and port capacity expansion on its eastern (Gulf of Oman) coast specifically to allow crude and other energy exports to reach international markets without transiting Hormuz
The development reflects a broader trend of India diversifying crude oil sourcing and shipping routes to reduce exposure to a single maritime chokepoint
The Strait of Hormuz — Geography of a Global Chokepoint
The Strait of Hormuz connects the Persian Gulf to the Gulf of Oman and the Arabian Sea, separating Iran (northern coast) from the Musandam Peninsula of Oman and a small stretch of UAE coastline (southern coast). It is roughly 167 km long, narrowing to about 39 km at its narrowest point, with shipping lanes only about 3 km wide in each direction.
Key Details
- Historically, roughly a fifth of global seaborne oil trade and a significant share of global LNG trade transits the strait, making it the world's single most important oil chokepoint
- Persian Gulf oil producers whose exports pass through Hormuz include Saudi Arabia, Iraq, the UAE, Kuwait, and Qatar; Iran itself also exports through the strait
- Only two countries border the strait directly: Iran and Oman
- Alternative bypass routes include Saudi Arabia's East-West (Petroline) pipeline to the Red Sea and the UAE's Habshan-Fujairah pipeline to the Gulf of Oman
Fujairah and Khor Fakkan sit on the Gulf of Oman side of the UAE, physically outside the strait, which is precisely why cargoes routed through them do not require Hormuz transit at all.
India's Crude Oil Import Dependency and Diversification Strategy
India imports the large majority of its crude oil requirement, exposing it directly to any disruption in Gulf shipping lanes. In response to recurring Hormuz-related risk, India has pursued source diversification — expanding purchases from Russia, the United States, and African and Latin American suppliers — alongside route diversification via non-Hormuz ports.
Key Details
- India's crude oil import dependency has been running at roughly 87-89% of total consumption in recent fiscal years
- Leading crude suppliers to India in recent data include Iraq, Russia, Saudi Arabia, and the UAE, with India now sourcing crude from around 40 countries
- India maintains Strategic Petroleum Reserves (SPR) at Visakhapatnam, Mangalore, and Padur, run by Indian Strategic Petroleum Reserves Limited (ISPRL) under the Ministry of Petroleum and Natural Gas, to cushion short-term supply shocks
- Roughly a third of India's total crude imports have historically transited the Strait of Hormuz, making it a key single-point vulnerability
Routing more energy cargoes through Fujairah and Khor Fakkan is a direct operational expression of this diversification strategy, reducing the volume of India-bound crude and gas exposed to Hormuz-transit risk.
UAE's East Coast Energy Infrastructure — Fujairah and Khor Fakkan
Fujairah and Khor Fakkan, both located on the UAE's eastern (Gulf of Oman) coastline, have become critical alternate hubs for energy and container trade during periods of Hormuz disruption. Fujairah hosts the terminus of the Abu Dhabi Crude Oil Pipeline (Habshan-Fujairah pipeline, capacity of roughly 1.8 million barrels per day), operated to move Abu Dhabi crude to export terminals without transiting the strait; a second parallel pipeline (West-East 1) is under construction to roughly double that Hormuz-free export capacity by 2027.
Key Details
- The Habshan-Fujairah pipeline runs about 400 km from onshore fields in Abu Dhabi to Fujairah's export terminal and storage hub
- Khor Fakkan is primarily a container transshipment terminal (operated by Gulftainer), separate from crude pipeline infrastructure but serving as a key alternate port for cargo and product movement
- Fujairah is also one of the world's largest bunkering (ship refuelling) hubs, third after Singapore and Rotterdam by some industry rankings
- The UAE's expansion plan aims to reduce its own dependence on Hormuz-transiting exports toward "zero" over the medium term
India's growing reliance on these two ports mirrors the UAE's own strategic pivot — as UAE capacity to move crude and cargo around Hormuz has expanded, Indian importers have gained a corresponding non-Hormuz sourcing option.
India-UAE Energy and Economic Partnership Framework
The India-UAE relationship in energy trade operates under the broader Comprehensive Economic Partnership Agreement (CEPA), signed in February 2022 and in force since May 2022 — India's first CEPA with a Gulf country — which includes provisions easing trade in energy products alongside goods and services more broadly.
Key Details
- India-UAE CEPA (2022) aims to increase non-oil bilateral trade to USD 100 billion within five years and cut or eliminate tariffs on over 80% of tariff lines
- UAE is also a partner in the India-Middle East-Europe Economic Corridor (IMEC), announced at the G20 Summit in September 2023, envisaged as a multi-modal transport corridor linking India to Europe via the Gulf and Israel
- The UAE has been among India's top crude oil suppliers, alongside Iraq, Saudi Arabia, and Russia, in recent import data
The current shift toward Fujairah/Khor Fakkan routing builds on this pre-existing institutional energy partnership, giving India a structurally embedded alternative when Hormuz-transit routes come under strain.
- Strait of Hormuz: connects Persian Gulf to Gulf of Oman; length ~167 km; narrowest width ~39 km; shipping lanes ~3 km wide each way
- Bordering countries: Iran (north) and Oman/Musandam Peninsula, with a small UAE coastal stretch (south)
- India's crude oil import dependency: approximately 87-89% in recent years (FY 2025-26 data)
- India sources crude from roughly 40 countries as of 2026, up from a much narrower base historically
- Habshan-Fujairah pipeline (ADCOP) capacity: ~1.8 million barrels/day; second parallel pipeline (West-East 1) targeted to double Hormuz-free capacity by 2027
- India-UAE CEPA: signed February 2022, in force May 2022; non-oil trade target of USD 100 billion within five years
- IMEC announced: G20 Summit, September 2023