UAE pushes ahead with Hormuz-bypass pipeline, nearing 50% completion, as ADNOC warns global energy security is under strain from conflict and chronic underinvestment, reports Asian Lite News Desk
The United Arab Emirates is accelerating efforts to safeguard its energy exports from mounting geopolitical risks, with a major new pipeline designed to bypass the Strait of Hormuz now nearing the halfway mark. The project, led by Abu Dhabi National Oil Company, reflects growing urgency among Gulf producers to secure alternative routes as regional tensions continue to disrupt one of the world’s most critical maritime chokepoints.
Speaking at the Atlantic Council, ADNOC’s Group Chief Executive Sultan Ahmed Al Jaber confirmed that construction of the second pipeline—intended to double export capacity from Fujairah on the UAE’s east coast—is already around 50 per cent complete. The line is being fast-tracked for delivery by 2027, forming a central pillar of the country’s long-term energy resilience strategy.
Race to outflank Hormuz risks
Al Jaber warned that global energy markets remain dangerously exposed to a handful of strategic bottlenecks, with the Strait of Hormuz at the centre of current disruptions. The waterway, which handles a significant share of the world’s oil, gas and commodities trade, has become increasingly vulnerable amid ongoing regional instability.
He argued that the crisis has exposed the fragility not just of oil flows, but of the broader global supply chain. From liquefied natural gas and jet fuel to fertilisers, plastics and critical minerals, the disruption has triggered price spikes across multiple sectors. Fuel costs have surged by around 30 per cent, fertiliser prices by 50 per cent and airfares by roughly a quarter, placing pressure on economies worldwide.
The new pipeline, which will bypass Hormuz entirely by routing exports through Fujairah, is designed to mitigate precisely these risks. ADNOC had already invested in alternative infrastructure more than a decade ago, but the current conflict has accelerated plans to expand capacity and redundancy.
Al Jaber painted a stark picture of the global energy system, warning that chronic underinvestment is leaving markets dangerously tight. Annual upstream investment, he said, is hovering around $400 billion—barely enough to offset natural decline rates in oil production.
At the same time, global spare capacity has fallen to around three million barrels per day, well below the five million barrels analysts consider a safe buffer. Recent months have also seen rapid drawdowns in global oil storage, with roughly 250 million barrels consumed in just two months, leaving the world with little more than a month’s effective cover.
He cautioned that restoring normal flows through Hormuz would take months even if conditions stabilise, with 80 per cent capacity unlikely to return for at least four months and full recovery potentially delayed until early 2027.
The ADNOC chief also renewed calls for the protection of maritime routes, warning that allowing any single actor to disrupt such a vital corridor could set a dangerous global precedent. Ensuring freedom of navigation, he said, is no longer just a regional concern but a fundamental pillar of global economic stability.
The pipeline project is part of a broader shift in the UAE’s energy strategy following its recent exit from OPEC, a move Al Jaber described as a calculated decision to gain greater flexibility in investment and market positioning.
With global oil demand expected to remain above 100 million barrels per day well into the 2040s, the UAE is positioning itself to supply what it describes as some of the lowest-cost, lowest-carbon barrels in the market. The expanded export capacity will allow ADNOC to reach customers more directly while reducing reliance on vulnerable transit routes.
At the same time, the company is diversifying aggressively into emerging sectors including artificial intelligence infrastructure, semiconductors, advanced manufacturing and critical minerals—areas increasingly seen as intertwined with future energy demand.
Al Jaber highlighted the growing energy footprint of AI, noting that global data centre electricity consumption could double to around 1,000 terawatt-hours by the end of the decade. This surge is transforming energy from a purely industrial concern into a strategic enabler of technological competitiveness.
