UAE Weighs Third Crude Pipeline to Bypass Hormuz
Reported Gulf pipeline option could affect global crude logistics and market risk for Bakken producers
The United Arab Emirates is considering a third crude oil pipeline that would deliver exports outside the Strait of Hormuz, according to a Rigzone report published Nov. 4, which cited people familiar with the matter.
If pursued, the project would add another route for Gulf crude to reach export markets without relying on Hormuz, one of the world’s most important chokepoints for oil shipments. The reported idea comes as producers, traders and pipeline builders look for ways to reduce exposure to regional disruptions that can move prices and logistics costs.
For Bakken operators, the development is relevant less as a direct competitor to North Dakota barrels and more as a signal about how global oil infrastructure is evolving. Williston Basin producers depend on pipeline capacity, refinery access and export markets to move crude and associated gas. Changes in Middle East export routes can influence crude benchmarks, tanker and pipeline logistics, and the risk premiums attached to supply disruptions.
For North Dakota royalty owners, the broader market effect may be indirect but meaningful. Royalty values track realized prices and takeaway capacity, and any change in global supply routes can influence the benchmarks used to price crude produced in the Williston Basin.
A Hormuz-bypassing pipeline could, over time, help stabilize supply flows from the Gulf by giving producers more flexibility if shipping conditions tighten. But it could also add long-term competition in global crude markets, especially if Gulf barrels reach buyers more easily. Bakken producers already compete with other North American and international barrels on price, quality and delivery terms.
The reported proposal underscores a broader industry theme: pipeline infrastructure remains central to oil security and market access. In the Bakken, operators have long faced the challenge of moving production from inland drilling areas to refineries and export hubs, making pipeline capacity, tariffs and takeaway routes a recurring business issue.
Source
Rigzone