Abu Dhabi National Oil Co. (ADNOC), the UAE’s biggest oil producer, is investing $1.3 billion to expand its tanker fleet as the country increases crude exports. The investment comes as shipping through the Strait of Hormuz faces major security challenges amid the ongoing conflict between the US and Iran. ADNOC Logistics & Services (ADNOC L&S) has nearly doubled its Very Large Crude Carrier (VLCC) fleet from eight to 14 vessels. Each VLCC can carry around 2 million barrels of crude oil. The company has also added five vessels used to transport fuels such as propane.

The fleet expansion reflects the UAE’s growing need for shipping capacity. The country has increased its oil shipments after leaving the Organisation of the Petroleum Exporting Countries (OPEC). The move has raised expectations of higher production and stronger demand for tankers. ADNOC has also become a major exporter through the Strait of Hormuz. Over the past two months, it has moved more crude through the waterway than any other producer.

ADNOC has continued transporting crude and refined products despite the risks around Hormuz, using its own vessels along with chartered tankers. Some shipments have moved at night and under military escort. This has allowed ADNOC to continue moving oil out of the Gulf, where cargoes can then be transferred to other vessels.

The UAE also has another route for exporting crude. A cross-country pipeline allows the country to bypass the Strait of Hormuz. However, the pipeline has limited capacity. It can transport less than half of the 3.6 million barrels per day that the UAE has exported during the past two months. This has made access to tankers increasingly important for maintaining export volumes.

The tanker market has also changed sharply this year. A South Korean entrepreneur, backed by a stake from the world’s largest container shipping company, has acquired a large number of super tankers. The buying activity pushed tanker earnings higher even before the conflict with Iran began. Oil producers responded by trying to secure vessels for their own cargoes. An industry executive said earlier this year that companies had been racing to find available tankers.

The pressure on tanker availability has increased further during the conflict. Shipping companies face higher risks when operating through Hormuz, while oil producers still need to keep exports moving. ADNOC’s decision to expand its owned fleet gives it greater control over transportation at a time when chartering vessels has become more difficult and expensive.

Saudi Arabia has also relied on its own infrastructure to protect oil exports from disruptions around Hormuz. The country operates a pipeline that carries crude from fields near the Gulf across the Arabian Peninsula to the Red Sea. This gives Saudi Arabia an alternative export route and reduces its dependence on the Strait for some shipments.

ADNOC L&S bought all six VLCCs and three of the Very Large Gas Carriers (VLGCs) from the secondary market. The vessels are expected to be delivered during the current quarter. The remaining two VLGCs are new-build ships and are scheduled for delivery in the fourth quarter. The purchases form part of ADNOC L&S’s wider strategy to strengthen its shipping capacity and respond to growing demand for energy transportation.

The $1.3 billion fleet expansion comes at a crucial time for the UAE’s oil industry. Higher exports, limited pipeline capacity and continued risks in the Strait of Hormuz have increased the importance of reliable tanker access. By adding more vessels to its fleet, ADNOC is seeking to secure the transportation needed to support its expanding crude exports while reducing its dependence on the wider tanker market.