UAE Accelerates 'Zero Hormuz' Strategy to Diversify Trade Routes Following Iran Conflict

The UAE is set to accelerate efforts to reduce its reliance on the Strait of Hormuz in the wake of the Iran war. By advancing its “Zero Hormuz” strategy, the nation aims to diversify trade routes and supply chains, while maintaining the waterway's vital importance, according to an adviser at the office of the Foreign Minister.

Mohammed Al Dhaheri, former director of the Strategy and Future Department at the UAE Foreign Ministry, noted that while the strategy predates the conflict, the ongoing crisis will intensify the country's push for alternative routes. These include expanded port capacity, rail connectivity, and new economic corridors. Nevertheless, the Strait of Hormuz will remain crucial for the UAE, the broader Gulf region, and the international system.

“Zero Hormuz means … we will expedite the efforts to have different sorts of routes and double down on investments in different sorts of ports like Khor Fakkan and Al Fujairah, [and] add to that the connectivity when it comes to Etihad Rail,” Mr Al Dhaheri stated on the sidelines of the Hili Forum in Abu Dhabi, speaking to The National.

“The Strait of Hormuz will remain of importance … and we still insist on the freedom of navigation [under] international law and on the Strait of Hormuz going back to the status before the war,” added Mr Al Dhaheri, who also serves as the deputy director general of the Anwar Gargash Diplomatic Academy.

Prior to the Iran war, approximately one-fifth of the world's oil and gas moved through the waterway. Following threats, Iran proceeded to block the strait, causing energy prices to surge and triggering a global economic crisis. The status of the waterway remains a key hurdle in negotiations between Washington and Tehran, with mediation by Qatar and Pakistan. Tehran asserts that the strait belongs to Iran and Oman, a stance largely rejected by Gulf states.

Dr Thani Al Zeyoudi, Minister of Foreign Trade, reported at the same forum that the UAE has established regional logistics corridors linking the Arabian Gulf to the Red Sea and the Gulf of Oman. Furthermore, the nation is collaborating with Omani authorities to process UAE-bound cargo through the ports of Sohar and Duqm. A new pipeline is also under construction to boost export capacity for Abu Dhabi oil via the Gulf of Oman.

This expansion builds upon a framework outlined by Dr Al Zeyoudi in June, aimed at cutting dependence on Hormuz to zero regardless of whether the shipping lane reopens. At that time, he indicated plans to expand eastern ports and develop pipelines, road networks, and rail links connecting directly to oilfields, gasfields, and petroleum facilities.

The impact of the Iran war has hit Gulf states hard, including the UAE, after missile strikes and attacks on oil tankers in the Strait of Hormuz attributed to Tehran. Mr Al Dhaheri emphasized that a permanent solution, rather than a temporary fix, is necessary to resolve the crisis.

“We have certain concerns that Iranians need to address in order to reach that comprehensive agreement,” he said. “GCC countries are influential countries, economically, politically, diplomatically. We have an extended sort of a network, and we are influential within the region and beyond the region. So Iran should look at us from that angle.”

In addition to trade routes, the diplomat stated that the UAE plans to broaden its security and defense partnerships. This move aligns with a broader strategy of diversifying political and economic alliances, expanding domestic defense manufacturing, and sparking potential discussions among GCC nations regarding new regional security frameworks.

“This crisis, as a lesson learnt, we will go hugely diversifying our security relations. That doesn’t mean we’ll go far from the US. The US is a strategic partner. We’ll double down on our relations with the US,” he concluded.