- Oil flows could take 4 months to return to 80% of their pre-war levels.
- Full flows may not return until first half of 2027: ADNOC chief.
- The United Arab Emirates planned infrastructure bypassing Hormuz ten years ago.
DUBAI: The UAE’s new crude oil pipeline bypassing the Strait of Hormuz is about 50% complete, the head of ADNOC said on Wednesday, adding that global oil flows could take at least four months to return to 80% of their pre-conflict levels after the end of the war in Iran.
Tehran has largely kept the waterway critical to global oil and gas supplies closed to all ships other than its own since the Feb. 28 U.S.-Israeli strikes, causing rising energy prices and inflation and stoking fears of an economic slowdown.
The Abu Dhabi Media Office revealed the existence of the new West-East pipeline project last week, saying Crown Prince Sheikh Khaled bin Mohamed bin Zayed had ordered state oil giant ADNOC to accelerate its construction in order to double export capacity through Fujairah port by 2027.
“Today it is already almost 50% complete and we are accelerating its delivery towards 2027,” Sultan Al Jaber said during a livestreamed Atlantic Council event, one of his most in-depth public remarks since the start of the war.
“Today, too much of the world’s energy still passes through too few choke points. This is exactly why the UAE made the decision more than a decade ago to invest in infrastructure that bypasses the Strait of Hormuz.”
The Abu Dhabi Oil Pipeline (ADCOP), which carries up to 1.8 million barrels per day, has proven crucial as the UAE seeks to maximize its exports from the Gulf of Oman coast, just outside the strait.
Iran, which has attacked ships to assert control over the strait, has expanded its definition of the waterway to include the United Arab Emirates’ Gulf of Oman coast. The United States imposed its own blockade on Iranian ports and attempted an abortive operation to reopen the chokepoint.
United Arab Emirates targeted
Gulf Arab countries, which host U.S. military bases, have been attacked during the conflict, even since the fragile ceasefire that began April 8.
The UAE has been targeted by more than 3,000 missiles and drones aimed at civilian infrastructure, including ADNOC, where damage assessment is ongoing and full operational capability could take weeks, or even months in some cases, Al Jaber said.
“The UAE has been attacked because of its development model,” he said.
Even if the conflict ended tomorrow, Al Jaber warned that pre-conflict flows across the strait would not fully return until the first or second quarter of 2027.
“Once you accept that a single country can hold the world’s most important waterway hostage, freedom of navigation as we know it only ends,” he said.
“If we do not uphold this principle today, we will spend the next decade defending ourselves against the consequences.”
Co-investors
The accelerated pipeline schedule follows the UAE’s withdrawal, effective May 1, from the de facto Saudi-led Organization of the Petroleum Exporting Countries (OPEC), freeing it from production quotas.
The exit was a “sovereign and strategic decision” driven by a global need for more energy, Al Jaber said, stressing that it “was not aimed at anyone” and “was not intended to sever any relationship”.
He warned that the global sector remained dangerously underinvested, pointing out that current upstream investments of around $400 billion a year barely offset rates of natural decline. Global crude reserve capacity, currently around 3 million b/d, needs to be closer to 5 million b/d, he added.
In the future, AI will strain global networks and the world underestimates how energy-intensive the revolution will be, Al Jaber said.
“In many ways, the race for AI is a race for electrons,” he said, emphasizing that the speed of AI-driven decision-making can mean the difference between continuity and disruption in a crisis.
Al Jaber reiterated the UAE’s commitment to investing heavily in the United States, adding that ADNOC, its international arm XRG and renewable energy investor Masdar, of which Al Jaber is chairman, already have investments worth $85 billion in 19 states.
“The UAE and the United States are not just trading partners. We are co-investors in the economy of the next century,” he said.
