The UAE has built nearly 50% of the second pipeline bypassing the Strait of Hormuz, the CEO of Abu Dhabi National Oil Company (ADNOC) said on Wednesday.
“Currently, too much of the world’s energy still passes through too few choke points,” Sultan Ahmed Al Jaber said in an interview at the Atlantic Council.
The new pipeline will double ADNOC’s export capacity via the Port of Fujairah, located in the Gulf of Oman just beyond Hormuz. The UAE is accelerating construction of the project in response to the Iran war. The pipeline is expected to be operational in 2027.
Iran has been blockading Hormuz since early March, blocking oil and gas exports from the UAE and other Gulf Arab states. The UAE has diverted some of its oil exports to Fujairah through existing pipelines with up to 1.8 million barrels per day.
Al Jaber said the Hormuz blockade had caused the most severe energy supply disruption in history. The CEO said more than 1 billion barrels of oil had been lost due to the strait closure. He said nearly 100 million more barrels are being lost each week as Hormuz remains closed.
Al Jaber said that even if the conflict were to end quickly, it would take at least four months for oil spills to increase to 80% of normal levels. He said it would take until the first or second quarter of 2027 for oil flows to fully normalize.
“This is not just an economic issue,” Al Jaber said. “Indeed, this sets a dangerous precedent when you accept that one country can hold the world’s most important waterway hostage.”
Iran blockaded Hormuz after the United States and Israel launched massive airstrikes against the city on February 28. These airstrikes killed Iran’s supreme leaders, including Head of State Ali Khamenei.
U.S. Energy Secretary Chris Wright told CNBC on Friday that Hormuz’s importance in global energy markets will decline after the Iran war as Gulf countries build more pipelines bypassing Hormuz.
“This is a card you can play once,” Wright said of the Iran blockade. “There may be other routes to extract energy from the Persian Gulf.”
“The importance of the Strait of Hormuz will decline, but the importance of energy production and energy supply for these countries will not decline,” he said.
