Dubai Moves to Build Alternative Port Amid Hormuz Disruption

DP World, a logistics company owned by the Dubai government in the United Arab Emirates (UAE), is considering building a new port that would allow cargo to be transported without passing through the Strait of Hormuz. With ship traffic through the Strait of Hormuz disrupted by the ongoing war between the United States and Iran, the new port is expected to emerge as a prominent alternative.

Reuters Yonhap News

According to a report by the Financial Times (FT) on July 13 (local time), citing sources familiar with the matter, DP World is in discussions to build an entirely new multi-purpose port on the coast of Fujairah. Fujairah is located on the Gulf of Oman, outside the Strait of Hormuz.

This plan by DP World comes after operational disruptions at Jebel Ali Port, a key asset representing both DP World and Dubai. Due to the war between the United States and Iran, port activities at Jebel Ali have plummeted by 90 to 95 percent.

FT noted that DP World’s latest initiative aligns with the UAE government’s strategy to reduce dependence on the Strait of Hormuz. Before the war, a daily average of about 135 vessels transited the Strait of Hormuz, but since the temporary ceasefire between the United States and Iran, the number has dropped to around 40 per day. Although the strait was briefly reopened following the ceasefire agreement, ship traffic has yet to recover.

If a new port is constructed, DP World will be able to further strengthen its business base around the Gulf of Oman. In particular, the company would be able to import and export cargo to and from the UAE without passing through the Strait of Hormuz, then transport goods by truck to Dubai, Abu Dhabi, and neighboring Gulf countries.

Related sources said DP World is currently discussing a term sheet outlining key business conditions with government officials, but the structure and financing for the new project have not yet been finalized. A senior company official stated that the new port could be completed in as little as 18 months. While DP World did not confirm specific details about its business activities on the eastern coast, the company said that diversification plans are underway to overcome current operational disruptions.

Although the new project may appear to be a replacement for Jebel Ali Port, UAE authorities stressed that it is not an alternative port. Built and expanded over several decades, Jebel Ali consists of an extensive economic free zone, warehouses, and heavy industrial facilities. A senior DP World official told FT, "Jebel Ali will remain Jebel Ali," adding, "There will never be any downsizing."

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