UAE's Adnoc announces $8bn gas expansion, as it mulls Hormuz bypass

What Happened

The UAE's state-owned Abu Dhabi National Oil Company (Adnoc) announced an $8 billion investment to expand its gas business, including a new domestic natural gas processing unit at Habshan and a new gas export facility at Ruwais. Adnoc Gas CFO Peter van Driel also said the company was weighing plans to build a liquefied natural gas (LNG) export facility outside the Strait of Hormuz, in addition to the Ruwais facility, amid ongoing shipping disruptions. Qatar declared force majeure on LNG shipments through autumn due to the US-Israeli war on Iran, and both Qatari and UAE vessels have been attacked by Iran in recent months. Reuters reported in June that the UAE paid Iran billions of dollars to halt attacks on its vessels, while the UAE has continued oil exports via a pipeline to Fujairah, outside the strait. The UAE boosted oil production to an all-time high of 4.1 million barrels per day in June, after leaving OPEC in May 2026.

Key Actors

Why It Matters

The Strait of Hormuz is a critical chokepoint for roughly 25% of global energy transit. Persistent attacks on shipping are accelerating Gulf states' investments in alternative export routes, such as the UAE's Fujairah pipelines and potential Hormuz-bypassing LNG facilities. The UAE's expansion and its claimed payment to Iran highlight the complex interplay of energy security, regional conflict, and autonomous policy moves after leaving OPEC.

Watch For

Progress on the UAE's second pipeline to Fujairah and the final investment decision on an LNG facility outside Hormuz; outcomes of US-Iran negotiations that could alter maritime security dynamics; any new attacks on commercial vessels as the ceasefire environment evolves; and whether the Iraq-Syria pipeline rehabilitation proceeds with US backing.