For more than four decades, Jebel Ali has been at the heart of Dubai’s transformation from a regional trading centre into one of the world’s major commercial hubs. Now, the war between the US, Israel and Iran has exposed the vulnerability of the system built around the port, as severe disruption in the Strait of Hormuz threatens the maritime flows on which Dubai’s economy depends.
The Financial Times, which reported on the crisis, cited Eirik Hooper, a senior associate at maritime consultancy Drewry and former DP World executive, as warning that an “on-again, off-again scenario” for Gulf shipping posed “an existential risk” to the emirate. Jebel Ali, he said, had been “instrumental in the growth of Dubai and its business model”.
The port’s origins lie in Dubai’s long history as a trading centre and its role as a communications and commercial link between India and the UK during the period when the emirate was a British protectorate. The idea was developed by Sheikh Rashid bin Saeed Al Maktoum, Dubai’s ruler during the 1970s and 1980s, despite criticism at the time that the project was excessively ambitious for a city whose existing port was underused.
Adeel Malik, associate professor of development economics at Oxford, said Sheikh Rashid’s vision was “grounded in the specific realities and needs of Dubai”. Jebel Ali subsequently became more than a port.
The decisive development came in 1985 with the creation of the Jebel Ali Free Zone. Companies could import components, manufacture or assemble goods locally and re-export them without going through the normal customs regime. The zone is now home to 12,000 companies.
The model helped combine ports, free trade and the movement of capital, goods and labour. Malik said this enabled Dubai to build “a substantial non-oil economy” while other states in the region remained more dependent on hydrocarbons.
The scale of Jebel Ali’s importance is reflected in its economic contribution. The port and free-trade zone together account for more than a fifth of Dubai’s GDP. Jebel Ali was responsible last year for 30 per cent of the revenues of DP World, one of Dubai’s most prominent companies and an enterprise ultimately owned by the emirate’s ruling family through Dubai World.
International investors have also placed substantial sums behind the port. In 2022, Canadian pension fund Caisse de dépôt et placement du Québec paid $5 billion for a 22 per cent stake in a joint venture covering three Dubai assets, including Jebel Ali’s port and free-trade zone. Saudi Arabia’s Hassana subsequently invested $2.4 billion for a 10 per cent stake.
Before the war, Jebel Ali’s four container terminals, equipped with more than 110 cranes, handled about 40,000 twenty-foot equivalent units a day, according to Lloyd’s List, making it by far the Middle East’s largest shipping hub.
The war has now put that system under its most serious strain in decades.
Container volumes plunged by more than 90 per cent during the early weeks of the conflict, according to DP World executives, and have barely recovered. Shipping through the Strait of Hormuz remained subdued even after an interim June agreement to extend a ceasefire and gradually reopen the waterway. According to shipbroker Clarksons, traffic averaged just 17 vessels a day in the week to August 28, compared with roughly 135 before the war.
The resumption of hostilities this week threatens to put further pressure on maritime traffic.
The disruption comes at a sensitive time for DP World following the sudden departure in February of longtime chair and chief executive Sultan Ahmed bin Sulayem after revelations about his ties to the late sex offender Jeffrey Epstein drew objections from some of the group’s international partners.
DP World has sought to stress the resilience of its wider network, saying container volumes elsewhere continued to grow by 7–8 per cent a year. Its global network of 60 ports in 80 countries has also helped maintain trade during the conflict.
But the crisis has revived a fundamental question for the UAE: whether it can build viable alternatives to infrastructure dependent on the Strait of Hormuz.
DP World plans two port terminals in Fujairah, on the Gulf of Oman coast, as part of a wider effort to reduce the UAE’s economic exposure to the strait. The company said the facilities would have roughly half of Jebel Ali’s general cargo capacity, depending on cargo mix, and would take about two years to construct.
Yet Fujairah remains within range of Iran’s short-range missiles and has been targeted during the war. Other operators are also investing on the Gulf of Oman coast. Gulftainer has announced a $2 billion expansion of Khor Fakkan in Sharjah, while French shipping company CMA CGM plans to invest $400 million in Oman’s Sohar port.
Ahmad al-Hassan, chief executive of DP World GCC, said the company remained confident in Jebel Ali’s long-term prospects but was seeking to “build resilience” around the port through investments on the UAE’s east coast.
The difficulty is that Jebel Ali is not simply a port that can be replicated elsewhere. Its strength lies in the vast commercial and transport network that has developed around it.
Steve Williams, chief executive of Nippon Express UK, said the combination of Jebel Ali’s maritime links and Emirates’ air freight capacity had made Dubai a cost-effective sea-air hub. A senior Emirati executive similarly said it would be impossible to “build the same system . . . in Fujairah”, because Jebel Ali “has all the infrastructure around it”.
The vulnerability was not unexpected. Hooper said the possibility of disruption in the strait had long concerned DP World, although little had been done to mitigate the risk.
There is spare capacity elsewhere in the region. Drewry estimates that ports outside the Gulf and less exposed to the strait could accommodate as much as 20 million TEU a year, compared with roughly 15 million handled at Jebel Ali. But many lack the transport infrastructure required to serve Dubai efficiently.
Salalah in Oman, for example, has 3 million TEU of additional capacity but is about 1,200 kilometres from Dubai by road through remote desert and has no freight railway, according to Drewry.
That makes Jebel Ali’s disruption a threat not merely to DP World but to the wider economic strategy that has made Dubai a global commercial centre.
“This is really a turning point for Dubai and the UAE more than any other state,” Malik said.
Iran’s own dependence on Dubai could, however, provide one constraint on further disruption. Jim Krane, a fellow in Middle East energy studies at Rice University, said an Iranian economist had once described Dubai as “the second-most important city to the Iranian economy, after Tehran”. Iran, he added, therefore had “a strong incentive” to ensure ships could access Jebel Ali and that trade between Dubai and the wider world continued.
But the war has made one fact increasingly difficult to ignore: Dubai’s extraordinary economic success remains deeply connected to a single strategic maritime gateway.
“Dubai as we know it would not exist without Jebel Ali,” Krane said. “It’s just that important.”
