Abu Dhabi will become the oil producing member of the Gulf Cooperation Council that is best insulated from a closure of the Strait of Hormuz, once the Habshan-Fujairah pipeline is fully operational later this year, Fitch Ratings says. In January, the UAE's energy minister said that the pipeline, designed to transport 1.5mbd, should hopefully be operational within six months. As we have previously said, a prolonged closure of the Strait is a low probability. As well as the practical challenge of physically blocking it, we think Iran would only choose to close an international shipping lane that is the world's most important oil chokepoint as a last resort, given the potential for international retaliation.
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