UAE says new oil pipeline bypassing Hormuz is 50% complete

DUBAI: The United Arab Emirates’ new crude oil pipeline designed to bypass the Strait of Hormuz is about halfway complete, ADNOC chief Sultan Al Jaber said on Wednesday, as he warned that global oil flows may need at least four months after the end of the Iran war to recover to 80% of pre-conflict levels.

The remarks came during a live-streamed Atlantic Council event and were among Al Jaber’s most detailed public comments since the conflict began. The Abu Dhabi Media Office had disclosed the West-East Pipeline project last week, saying Crown Prince Sheikh Khaled bin Mohamed bin Zayed had instructed ADNOC to speed up construction so export capacity through Fujairah could be doubled by 2027.

Al Jaber said the project was moving ahead quickly.

"Today, it's already almost 50% complete, and we are accelerating its delivery toward 2027,"

He said the UAE had decided more than a decade ago to invest in infrastructure that would avoid the Strait of Hormuz because too much of the world’s energy supply still passes through a limited number of chokepoints.

Strait disruption and export routes

Tehran has largely kept the strategic waterway closed to all shipping except its own vessels since US-Israeli strikes on February 28. The disruption has pushed up energy prices and inflation and increased concerns about an economic slowdown.

The existing Abu Dhabi Crude Oil Pipeline, or ADCOP, can transport up to 1.8 million barrels per day and has become an important route for the UAE as it seeks to maximise exports from the Gulf of Oman coast, outside the Strait.

Iran has attacked vessels as part of efforts to assert control over the Strait and has broadened its definition of the waterway to include the UAE’s Gulf of Oman coastline. The United States has imposed its own blockade on Iranian ports and also attempted an operation to reopen the chokepoint, though that effort was unsuccessful.

Attacks on the UAE

Al Jaber said Gulf Arab states hosting US military bases had come under attack during the conflict, including after the fragile ceasefire that began on April 8. He said the UAE had been targeted by more than 3,000 missiles and drones aimed at civilian infrastructure, including ADNOC facilities.

He said damage assessments were still under way and that in some cases full operating capacity could take weeks to months to restore.

"The UAE was attacked for its model of development," he said.

Al Jaber also said that even if the conflict were to end immediately, oil and gas flows through the Strait would not fully return to pre-conflict levels before 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 is just finished," he said.

"If we don't defend this principle today, we will spend the next decade defending against the consequences."

OPEC exit and investment outlook

The accelerated timeline for the pipeline follows the UAE’s withdrawal from the Saudi-led Organisation of the Petroleum Exporting Countries, effective May 1, which removed output quota constraints.

Al Jaber described the move as a sovereign and strategic decision driven by the world’s need for more energy. He said it was not directed at any country and was not meant to damage any relationship.

He also said the global energy sector remained significantly under-invested. According to Al Jaber, upstream investment of about $400 billion annually only just offsets natural decline rates, while global spare crude production capacity of around 3 million barrels per day should be closer to 5 million barrels per day.

Looking ahead, he said artificial intelligence would place growing pressure on electricity grids and that the world was underestimating how energy-intensive that shift would be.

"In many ways, the AI race is an electron race," he said, noting that the speed of AI-driven decision-making can be the difference between continuity and disruption during a crisis.

Al Jaber also reaffirmed the UAE’s commitment to major investment in the United States. He said ADNOC, its international arm XRG and renewable energy investor Masdar, where he serves as chairman, already hold investments worth $85 billion across 19 US 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.