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Saudi Arabia and the United Arab Emirates are collaborating to chart new trade routes that will increase efficiency and overcome transport disruptions amid the US-Israeli war on Iran.

The unprecedented trade initiative comes as a partnership between Saudi Ports Authority, Mawani, and the Sharjah logistics company, Gulftainer.

Sharjah will be directly connected to Dammam in the Kingdom’s east through sea and land transport to improve ”cargo flow efficiency and reduce transit time,” Mawani said in a post on X.

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The new trade route in the Gulf will bypass the Strait of Hormuz, a key passage for global trade that Iran continues to use as a bargaining chip and has largely blocked access to in protest of US-Israeli strikes on Tehran.

The Saudi-UAE route will connect ports from both countries, including Khorfakkan Commercial Terminal on the east coast of the UAE and inland logistics hubs such as Sajaa dry port in Sharjah.

“By leveraging Khorfakkan Inland Corridor – Khorfakkan Commercial Terminal, Sajaa Dry Port, and integrated inland and land-sea corridors, we enable direct, reliable transport linking the UAE to key Saudi market, Dammam,” Gulftainer said in a post on LinkedIn.

Considering disruptions to the vital Strait of Hormuz, through which Gulf countries carry out most of the trade transportation, the new corridor is aimed at strengthening supply chain processes and improving market access for both countries.

The war has all but halted shipments of oil and liquefied natural gas through the Strait, which typically carries about one-fifth of the world’s gas and crude supply, causing what the International Energy Agency has called the biggest-ever oil supply disruption.

Market participants are monitoring developments in the Strait of Hormuz following reports that Iran has begun charging transit fees on some commercial vessels.

Iran has told the United Nations Security Council and the International Maritime Organization that ”non-hostile vessels” may transit the Strait of Hormuz if they coordinate with Iranian authorities, according to a note seen by Reuters on Tuesday.

With Reuters

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