- It may take four months for oil flows to return to 80% of pre-war levels.
- Full flows may not return before first half of 2027: ADNOC chief.
- The United Arab Emirates planned a decade ago for infrastructure that would bypass Hormuz.
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 may take at least four months to recover to 80% of pre-conflict levels after the war with Iran ends.
Tehran has largely kept the critical waterway for global oil and gas supplies closed to all ships other than its own since the attacks between the United States and Israel on Feb. 28, sending energy prices and inflation soaring and stoking fears of an economic recession.
The Abu Dhabi Media Office revealed the existence of the new West-East Pipeline project last week, saying that Crown Prince Sheikh Khaled bin Mohamed bin Zayed ordered state oil giant ADNOC to accelerate its construction to double export capacity through the port of Fujairah by 2027.
“Today, it is 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 extensive public comments since the war began.
“Right now, much of the world’s energy still passes through very few choke points. That is exactly why the UAE made the decision more than a decade ago to invest in infrastructure circumventing the Strait of Hormuz.”
The existing Abu Dhabi Crude Oil Pipeline (ADCOP), which carries up to 1.8 million barrels per day, has proven crucial as the United Arab Emirates seeks to maximize exports from the Gulf of Oman coast, just outside the Strait.
Iran, which has attacked ships to assert its 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 bottleneck.
United Arab Emirates targeted
Arab Gulf countries, which host US military bases, have been attacked during the conflict, including since the fragile ceasefire that began on April 8.
The United Arab Emirates was hit by more than 3,000 missiles and drones targeting civilian infrastructure, including that of ADNOC, where damage assessment is ongoing and full operational capability could take weeks or months in some cases, Al Jaber said.
“The United Arab Emirates was attacked for 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 before the first or second quarter of 2027.
“Once it is accepted that a single country can hold the world’s most important waterway hostage, freedom of navigation as we know it has just ended,” he said.
“If we do not defend this principle today, we will spend the next decade defending it against the consequences.”
Co-investors
The accelerated pipeline schedule follows the United Arab Emirates’ withdrawal, effective May 1, from the 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 directed at anyone” and “was not intended to break any relationship.”
He warned that the global sector remains dangerously underinvested, noting that current upstream investment of around $400 billion a year barely offsets natural decline rates. Global excess crude oil capacity, currently around 3 million bpd, needs to approach 5 million bpd, he added.
Looking ahead, AI will put pressure on global networks and the world is underestimating how energy-intensive the revolution will be, Al Jaber said.
“In many ways, the AI race is an electron race,” he said, noting that the speed of AI-powered decision-making can make the difference between continuity and disruption during 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, where Al Jaber is chairman, already have investments worth $85 billion in 19 states.
“The United Arab Emirates and the United States are not just trading partners. We are co-investors in the economy of the next century,” he said.
