A. SREENIVASA REDDY (ABU DHABI)
Ratings of UAE-based port operators AD Ports and DP World are expected to remain resilient even in the event of a prolonged closure of the Strait of Hormuz, Fitch Ratings said in an assessment.
Fitch cited several mitigating factors that would enable UAE port operators to weather such disruption. “Global diversification provides natural hedges, while flexibility in capital allocation and shareholder distributions, combined with operating leverage (70%-75% variable costs) and fuel representing less than 5% of operating expenses, supports rapid cost adjustment,” the agency said.
“Both companies are well positioned to capture rerouting demand and benefit from increased storage revenues,” Fitch added.
AD Ports’ rating is closely linked to the government of Abu Dhabi. Fitch expects only a limited impact on Abu Dhabi’s public finances from a potential closure of the Strait, given the emirate’s anticipated large budget surplus.
The agency noted that AD Ports’ UAE terminals remained operational, with only limited impact on its maritime and shipping segment despite reduced port calls.
“Fixed concession fees at Khalifa Port, increased transhipment volumes and government support provide downside protection,” Fitch said.
Vessels are being redirected to Fujairah and Khorfakkan instead of Khalifa Port, with Karachi serving as an additional alternative, while the government is absorbing incremental operating costs.
Fitch also highlighted AD Ports’ strong liquidity position, noting that the company maintains a $1 billion revolving credit facility maturing in 2029, holds $750 million in cash, and has no material debt maturities within the next two years.
Turning to DP World, Fitch said Jebel Ali accounts for about 27% of the company’s volumes. While origin-and-destination cargo could be affected, transhipment flows are likely to be rerouted to nearby terminals.
The ratings agency noted that potential revenue losses could be offset by storage revenues and stranded cargo. “Cargo, particularly commodities, continues to move east of the strait, where passage remains open, with rerouting to the Indian subcontinent,” Fitch said.
At the end of 2025, DP World held about $4.4 billion in cash and $400 million in undrawn credit facilities, underlining its strong financial position.
Fitch’s adverse scenario assumes a three-month closure of the Strait of Hormuz, followed by a gradual reopening, with oil prices averaging $100 per barrel in 2026.
More broadly, Fitch said most port operators across Europe, the Middle East and Africa (EMEA) have sufficient rating headroom to absorb the impact of such a disruption.
The overall effect is expected to be moderate to low, supported by diversified operations, long-term contracted revenues, tariff flexibility and strong liquidity buffers.
Operators such as Associated British Ports and Boluda have limited exposure to Middle East volumes, while Turkish ports may face some pressure but retain adequate rating headroom due to liquidity support and low leverage.