Why UAE industry needs steady hands, not sudden swerves.
In my latter years in the military in the 1980s, part of my ongoing education was studying the world’s economic hot spots and responding to a hard question: where might conflict break out, and what force would be needed to protect trade, economic stability, and allies? One of those places was the Strait of Hormuz. The lessons from the Aden Emergency in the 1960s and the Oman conflict that ran into the mid-1970s were plain enough: this is a hard region to control by force, and even harder to control cheaply. My own high-level view, then and now, is simple: better that politicians solve Hormuz through serious dialogue than have the military try to police it at great cost.
Using the same technique of scenario planning I did in the military, now a similar lens can be applied as we consider external forces, internal pressures and trigger points, and the UAE picture for oil and gas is now clear.
Iran has launched missile attacks targeting the UAE, and the UAE has joined partners in condemning attacks on commercial ships, oil and gas sites, and the de facto closure of Hormuz. That matters because roughly 20 million barrels a day and about a quarter of the world’s seaborne oil trade move through that narrow bottleneck. The UAE has some protection through ADNOC’s Abu Dhabi-to-Fujairah pipeline, but recent strikes on Fujairah show that a bypass route remains unsafe.
For CEOs, the trap is to behave like a ‘speedboat’ when they run ‘oil tankers’. Tactics should change fast; strategy should not change blindly. Panic-driven strategy changes can do as much harm as the war itself. Energy systems are slow to restart. The AP notes that even if tanker traffic resumes soon, oil and gas flows will take time to recover, and damaged facilities will take longer still. UNCTAD is already warning that higher fuel, freight and insurance costs are spreading through supply chains. In construction and development, that means delayed equipment and rising costs. In oil and gas, it means security, maintenance, crew welfare and cash control must come before grand new bets.
Five priorities stand out
Five priorities stand out. First, protect people and critical assets before volume targets. Second, keep the core strategy, but split projects into three boxes: must keep, slow burn, and pause. Third, lock in backup logistics and key spare parts now, not after a missed delivery. Fourth, set clear trigger points for shutdown, restart and capital release. Fifth, speak plainly to lenders, employees, contractors and government; silence breeds rumors, and rumors raise costs.
A company that throws away its strategy after collateral damage may pay twice: once for the hit, and again for abandoned projects and lost trust. The goal is not to look dramatic. It is to stay fit for business when normal traffic and calmer politics return.
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