UAE’s second pipeline bypassing Strait of Hormuz 50% complete, says Al Jaber
The UAE has accelerated the development of its second pipeline, with delivery planned for next year, said Sultan Ahmed Al Jaber, Minister of Industry and Advanced Technology and Managing Director and Group CEO of Adnoc.
“Energy security is no longer just about your ability to continue producing energy, but also about routes, access, storage, and redundancy. Too much of the world’s energy still moves through too few choke points. That is exactly why the UAE made the decision more than a decade ago to invest in infrastructure that bypasses the Strait of Hormuz,” he said during an interview with the Atlantic Council.
“It is why we moved ahead with our second pipeline in 2025. Today, it is already almost 50 per cent complete, and we are accelerating its delivery towards 2027,” he added.
He also warned that the oil industry is “dangerously underinvested”.
Sultan Ahmed Al Jaber said upstream investment is currently around $400 billion annually, which he noted is only enough to offset natural decline rates in oil production.
“Global spare capacity is around three million barrels a day. It should be closer to five million barrels a day. In just two months, the world drew down around 250 million barrels from storage. We have 30 to 35 days of effective cover. We need to at least double that,” he said during a virtual interview.
Following the closure of the Strait of Hormuz after the outbreak of the US-Israel-Iran conflict in February, global oil supplies were severely disrupted, as around 20 million barrels per day – nearly one-fifth of global oil supply – pass through the narrow waterway.
The UAE has also been routing part of its oil exports through Fujairah on the Indian Ocean, bypassing the Strait of Hormuz.
The new pipeline is expected to boost Abu Dhabi’s oil export capacity and significantly enhance supply security.
Losing 100 million barrels a week
Sultan Ahmed Al Jaber stressed that the closure of the Strait of Hormuz represents the most severe oil supply disruption on record.
“So far, the world has lost over a billion barrels of oil, and that number is increasing by almost 100 million barrels every single week. Brent crude is trading around 40 per cent above pre-closure levels of Hormuz,” he said.
“It is not just an oil story. We are talking about LNG, jet fuel, fertilisers, ammonia, urea, aluminium, helium, critical minerals, plastics, consumer goods, and general cargo products.”
“In other words, the entire supply chain of the modern global economy – from the food on your table to the planes in the sky and the chips in your phone – is being impacted as fuel prices continue to rise,” he added.
Recovery
Sultan Ahmed Al Jaber noted that even if the Middle East conflict ends tomorrow, it would take at least four months for oil flows to recover to 80 per cent of pre-conflict levels, while a full recovery may not happen before the first or even second quarter of 2027.
“This is not just an economic problem. In fact, it sets a dangerous precedent when a single country can hold the world’s most important waterway hostage. Freedom of navigation as we know it is effectively finished,” he said.
“If we do not defend this principle today, we will spend the next decade dealing with the consequences,” he added.
