Iran’s blacklist is the latest test of how sustainable the UAE’s fast-growing shuttle trade really is

The UAE’s shuttle and ship-to-ship (STS) transfer network scaled rapidly to keep regional crude barrels moving. But the workaround is now running into the same geopolitical risk it was designed to avoid: Iran has blacklisted 45 vessels, including tankers owned by Adnoc, for flouting its rules on crossing the Strait of Hormuz, threatening ships conducting STS transfers with fines, detention, or cargo confiscation.

What is the shuttle trade? Adnoc has built its export strategy around a shuttle model since the war disrupted normal Hormuz transits. Under the setup, vessels move crude from inside the Gulf to transfer points like Fujairah, where buyers — including China’s biggest state tanker operators, Cosco and CMES, which have avoided the strait entirely — collect it without having to send their own ships through the danger zone. That workaround let Adnoc sell more than 100 mn barrels via tenders even as chokepoint traffic collapsed. “It is a [form of] de-risking,” former head of supply chain and transport industries at the World Economic Forum Wolfgang Lehmacher tells EnterpriseAM. The model gives both sellers and buyers greater certainty that cargoes can actually be delivered, while adding another option to the supply chain.

The threat from Iran, however, could impact STS throughput, with at least three Indian refiners and a global energy major already planning to avoid Iran-blacklisted vessels, including for STS transfers, Reuters reports.

Iran’s threat could make more shipowners wary of receiving cargo from blacklisted tankers, shrinking the pool of vessels available for STS transfers, Lehmacher tells us. “The immediate issue is not whether every transfer stops, but whether a ship remains acceptable to insurers, charterers, and cargo interests,” he explains. “The reported avoidance of listed ships suggests that this risk is already affecting commercial decisions.”

The threat came just as Adnoc’s model was starting to scale up and get replicated by other regional oil firms. Saudi Aramco was observed to be moving crude through the strait aboard dedicated shuttle vessels before transferring it off Fujairah or Sohar last month, and QatarEnergy recently opted for the same switch, offering its first crude cargoes through STS transfers outside Hormuz. Shuttle-related STS liftings doubled to 3 mn bbl / d in June, up from 1.5 mn bbl / d in May and roughly 500k bpd in 2025, commodity analyst at Oil Price Natalia Katona estimates.

There was always a level of risk to the model anyway

“Every additional leg in a supply chain creates costs, creates risks,” says Lehmacher, citing costs like fuel, STS equipment and personnel, support craft, surveys, waiting time, ins., and demurrage. Plus: Moving the transfer outside Hormuz alone does not eliminate geopolitical exposure. “We may de-risk [the vessels] from a security point of view in Hormuz, but then the new STS locations become the target,” Lehmacher says. “No oil or gas field is safe nowadays and an insurer might look at it like that.”

By the numbers: Reported Hormuz war-risk rates reached 7.5-12.5% of vessel value in mid-August, Katona notes. The crude itself also takes a haircut: Countries with alternative pipelines or tanker fleets can command higher prices for their crude, while producers reliant on spot charters must offer much deeper discounts to compensate buyers, “particularly when owners are unwilling to enter the Gulf at almost any price,” explains Katona.

“The [shuttle trade] model can therefore be viewed as a continuity mechanism rather than new export capacity,” Katona says. For context: Even with the STS operations, estimated crude and petroleum-liquid flows through Hormuz averaged just 4.9 mn bbl / d in 2Q 2026, against 21.6 mn bbl / d before the conflict, she adds.

That’s precisely why the UAE is working on a more long-term workaround, with construction on a new West-East pipeline that will double crude export capacity from Fujairah accelerating — the project is set to be operational next year.

But that pipeline solves Adnoc’s problem, not the region’s. Fujairah’s appeal runs deeper than one pipe — which is why other producers are angling for a piece of it too.

Placing Fujairah in the bigger picture

Fujairah’s build-out is turning into a shared regional workaround, not just an Adnoc project other producers happen to use. Kuwait, which does not have a Hormuz bypass to export its crude, is also now in talks to route crude through Fujairah, Saudi Arabia, and Oman instead, The National reports.

Does it have the capacity? Oil storage capacity is at almost 18 mn cbm today, according to the Port of Fujairah’s figures, and around 1.5 mn sqm of reclaimed land is earmarked for further build-out by 2028.

That’s what separates Fujairah from a patch of open water where tankers happen to meet. It’s the world’s third-largest bunkering hub after Singapore and Rotterdam, backed by three decades of pipeline, storage, and berth investment. Sohar, 150 km south in Oman, has spent years trying to chip into that position — but the war has pushed more of the region’s crude toward both anchorages at once.

Storage isn’t the constraint, though — choreography is. Precise, continuous counts of vessels anchoring at Fujairah don’t exist, but the snapshots available point the same way. Tracking data from Misbar shows 20 simultaneous STS transfers across the Gulf of Oman on August 25, including six off Fujairah and 10 off Sohar. That marks a sharp surge from mid-July, when Bloomberg satellite tracking spotted roughly four combined transfers off Fujairah and Sohar. More tankers are now competing for the same anchorage slots and the same pool of trained crews.

Scaling the model further means finding not only more available tankers and STS equipment, but a higher number of shipowners, trained crews, and insurers willing to accept the transit risk, Katona says. That’s in addition to constraints like weather-safe transfer slots, vessel synchronization, and maintenance, she adds.

Could some relief be coming? DP World is in talks to build a new multipurpose port and a container terminal at Fujairah, which would add further anchorage and berth capacity. The potential port is still just talks — a term sheet, no financing confirmed — and DP World’s plans center on containers and general cargo rather than crude, so how much that specific build-out eases pressure on the STS anchorage itself is still an open question.

On the tanker side, at least, Adnoc isn’t waiting for the market to catch up. It’s chartered around 15 crude carriers this year alone to keep shuttle movements running, and Adnoc L&S has committed roughly USD 2.7 bn to vessel acquisitions in 2026 — including six VLCCs bought in the past few weeks, the same class of supertanker that collects shuttled crude at anchorages like Fujairah.