Saudi Arabia, UAE launch Hormuz-bypass trade corridor amid escalating Gulf disruptions
New Delhi, March 25. In a significant move to counter mounting supply chain disruptions triggered by the US-Israel war on Iran, Saudi Arabia and the United Arab Emirates (UAE) have joined hands to establish new trade routes aimed at improving efficiency and ensuring continuity of cargo movement across the Gulf.
The initiative is being spearheaded through a collaboration between the Saudi Ports Authority (Mawani) and UAE-based logistics firm Gulftainer. At the heart of the plan is a multimodal corridor that will directly connect Sharjah with Dammam in eastern Saudi Arabia through an integrated network of sea and land transport, designed to streamline cargo flows and significantly cut transit times.
Crucially, the proposed route bypasses the strategically vital Strait of Hormuz, which has become a focal point of tension amid the ongoing conflict. Iran has effectively restricted access through the narrow waterway – one of the world’s busiest trade arteries – in response to US-Israeli strikes, using it as a key lever in the crisis.
The corridor will link major logistics nodes across both countries, including the UAE’s Khorfakkan Commercial Terminal and inland facilities such as Sajaa Dry Port, with Saudi Arabia’s eastern commercial hub of Dammam. By integrating inland corridors with maritime routes, the project aims to create a seamless and reliable transport chain between the two economies.
According to Gulftainer, the use of the Khorfakkan Inland Corridor, alongside connected land-sea logistics infrastructure, will enable direct and dependable cargo movement linking the UAE with key Saudi markets.
The initiative comes at a time when disruptions in the Strait of Hormuz have severely impacted global trade. The waterway typically handles nearly one-fifth of the world’s oil and liquefied natural gas shipments, and the ongoing conflict has brought a large portion of this traffic to a standstill. The International Energy Agency has described the situation as the most severe oil supply disruption on record.
Adding to market uncertainty, reports suggest that Iran has begun imposing transit fees on certain commercial vessels navigating the Strait. Tehran has also informed the UN Security Council and the International Maritime Organisation that passage will be permitted only for “non-hostile” vessels that coordinate with Iranian authorities – further complicating navigation through the already volatile chokepoint.
Against this backdrop, the Saudi-UAE corridor is being viewed as a crucial step toward strengthening regional supply chains and ensuring more resilient access to global markets.
