UAE Plans New Port On 'East Coast' To Avoid Iran Fire In Hormuz

DP World, an Emirati multinational logistics company, is reportedly planning to shift its operations on the east coast of the United Arab Emirates to reduce Dubai's reliance on its flagship Jebel Ali hub and the Strait of Hormuz. The Dubai-based company is in talks to develop a brand new multipurpose port in the coastal area of Fujairah and a new container terminal at the existing harbour in the same emirate, according to a Financial Times report. 

DP World has emerged as one of the UAE's most global entities over the past two decades, building a ports and logistics empire across the globe. Among them, Jebel Ali remains the group's crown jewel, which helped establish Dubai as the global trade and finance hub. Shifting some of the port's capacity outside Dubai would mark a seismic shift for the UAE. 

But, according to the FT report, DP World's plans align with Abu Dhabi's broader plan to bulletproof its economy against future unrest in the Middle East by reducing its dependence on the Strait of Hormuz, where shipping has been disrupted by Iranian and US blockades. 

About The Project

The new port is also likely to deepen DP World's penetration in the Gulf of Oman, allowing shipments to travel in and out of the country without needing to pass through the narrow waterway between Oman and Iran. The shipments can then be moved overland to  Dubai, Abu Dhabi and neighbouring Gulf countries, on trucks. 

The company is now reportedly discussing a term sheet with Emirati officials. The structure and financing of the project is yet to be finalised, people familiar with the matter told FT. 

The company has not confirmed any details of the new project but said that "there are plans in the works around diversification to get through this disruption."

The new port could be completed as soon as within a year and a half, a senior company official told FT. 

Why UAE Need New Port

Since Iran closed the Strait of Hormuz at the end of February as a response to US-Israeli strikes, the activity at Jebel Ali, the region's largest container port, has fallen by 90 and 95 per cent, pushing the port operator to seek alternatives to the waterway. UAE has also been one of the most frequest target of Iran during the chaos, with nearly 3,000 drones or missiles --more than any other country- firing at the country. 

Jebel Ali also came in the line of fire early on in the conflict after a fire erupted at the port, which authorities attributed to falling debris after a missile interception.

What Happens To Dubai Port

According to Gulf officials, the new port on the east coast would not mean the port in Dubai would be fully replaced. "Jebel Ali will continue to be Jebel Ali. It will never be downsized," a senior official at the company told the FT.

They said that DP World would initially develop the new facilities, but that could rise over time depending on how much additional capacity was required.

"We do have our own plan, and we've been very active in terms of looking at the eastern coast as far as DP World is concerned," the senior official said. "It's defensive in case things go wrong," he said.