Fujairah oil hub resumes operations after drone strike
Restoration at key UAE port provides limited relief as Strait of Hormuz remains closed amid Iran war
Oil loading operations at the United Arab Emirates' Port of Fujairah have resumed following a drone strike that forced a temporary shutdown, offering some relief to global energy markets gripped by escalating Middle East tensions.
The resumption comes after operations were suspended on March 16 when a drone attack sparked a fire in the emirate's petroleum industrial zone, marking the second disruption at the vital bunkering hub in recent days. An Indian-flagged vessel, Jag Laadki, carrying 80,800 tonnes of UAE's Murban crude, departed from Fujairah for India on Sunday, according to four industry sources.
Fujairah's return to normal operations is critical for global oil flows. The port, located on the Gulf of Oman about 70 nautical miles from the Strait of Hormuz, handles an average of 1.7 million barrels per day of crude oil and refined fuels—approximately 1.7% of daily world demand. The UAE uses the 1.5 million barrel-per-day Abu Dhabi Crude Oil Pipeline to transport crude from Abu Dhabi's fields to Fujairah, allowing it to bypass the Hormuz Strait, which has been effectively closed since the start of the Iran-US-Israel conflict on February 28.
Brent crude, the global benchmark, closed at $101.10 per barrel on March 16, down 1.98% from the previous session after trading as high as $106.50 intraday. Despite the modest pullback, prices have surged more than 40% since the conflict began, raising concerns about inflation and economic growth. Oil prices remain above $100 per barrel, a level not consistently seen since July 2022.
The broader supply outlook remains constrained. The war has already reduced Middle Eastern oil production by over seven million barrels per day, equivalent to 7% of global supply, according to the International Energy Agency, which has described the situation as the largest disruption to global energy supplies in history. The Strait of Hormuz, through which about one-fifth of global oil supply normally passes, is seeing minimal traffic—daily transits have plummeted from an average of 138 vessels to no more than five ships per day.
US President Donald Trump has called for an international coalition to reopen the waterway, but the appeal has met with a muted response from allies including China, Japan, France, and the UK. Iran has halted shipping through the strait in retaliation for US and Israeli strikes on its facilities, including the Kharg Island export hub.
Fujairah's significance extends beyond crude exports. The port boasts storage capacity of 18 million cubic meters, making it the Middle East's largest commercial storage hub for refined products. It sold 7.4 million cubic meters of marine fuels in 2025, ranking as the world's fourth-largest bunkering hub. Major global storage companies operate facilities at the port, which also serves as a key location for blending operations.
Market participants are watching for any further escalation. Iran had previously threatened new attacks on UAE ports, including Fujairah, after US strikes on its infrastructure. The port's restoration provides a temporary reprieve, but the fundamental supply concerns stemming from the Hormuz closure are likely to keep oil markets volatile in the coming weeks.