UAE says Hormuz bypass pipeline nearly 50% complete

The United Arab Emirates has built nearly 50% of a second pipeline that will bypass the Strait of Hormuz, said the CEO of Abu Dhabi National Oil Co., or ADNOC, on Wednesday.

“Right now, too much of the world’s energy still moves through too few chokepoints,” Sultan Ahmed Al Jaber said in an interview at the Atlantic Council.

The new pipeline will double ADNOC’s export capacity through Fujairah, a port that sits on the Gulf of Oman just beyond Hormuz. The UAE has accelerated the construction of the project due to the Iran war. The pipeline is expected to become operational in 2027.

Iran has blockaded Hormuz since early March, choking off the oil and gas exports of the UAE and the other Gulf Arab producers. The UAE has redirected some oil exports through an existing pipeline to Fujairah, which has a maximum capacity of 1.8 million barrels per day.

The Hormuz blockade has triggered the most severe energy supply disruption in history, al Jaber said. More than 1 billion barrels of oil have been lost due to the strait’s closure, the CEO said. Nearly 100 million additional barrels are lost every week that Hormuz remains closed, he said.

It will take at least four months to ramp oil flows up to 80% of normal levels even if the conflict ends immediately, Al Jaber said. It will take until the first or second quarter of 2027 for oil flows to fully normalize, he said.

“This is not just an economic problem,” Al Jaber said. “In fact, this sets a dangerous precedent once you accept that a single country can hold the world’s most important waterway hostage.”

Iran blockaded Hormuz after the U.S. and Israel launched a massive wave of airstrikes against it on Feb. 28. Those strikes killed top Iranian leaders including head of state Ayatollah Ali Khamenei.

U.S. Energy Secretary Chris Wright told CNBC on Friday that the importance of Hormuz to the global energy market will decline after the Iran war, as Gulf nations build more pipelines to bypass it.

“This is a card you can play once,” Wright said of Iran’s blockade. “There’ll be other routes for energy to get out of the ian Gulf.”

“We will see a decreasing importance from the Strait of Hormuz, but not a decreasing importance of those nations’ energy production and energy supply,” he said.

CNBC