The United Arab Emirates (UAE) is hastening the construction of a second pipeline to circumvent the Strait of Hormuz, in light of the ongoing Iran conflict.

The CEO of Abu Dhabi National Oil Co. (ADNOC), Sultan Ahmed Al Jaber, in an interview at the Atlantic Council on Wednesday, announced that nearly 50% of the pipeline is now complete. This new pipeline will double ADNOC’s export capacity via Fujairah, a port on the Gulf of Oman, just outside Hormuz.

The project’s pace has been accelerated due to ongoing tensions with Iran. The pipeline is expected to be functional by 2027. Al Jaber noted that even if the conflict were to cease immediately, it would take at least four months to boost oil flows to 80% of normal levels. Full normalization of oil flows is anticipated by the first or second quarter of 2027.

Al Jaber voiced his concern about the current situation, stating, “Right now, too much of the world's energy still moves through too few chokepoints.”  He further stated, “This is not just an economic problem…this sets a dangerous precedent once you accept that a single country can hold the world's most important waterway hostage.”

Wright Sees Reduced Hormuz Reliance

On Friday, Energy Secretary Chris Wright told CNBC that the Strait of Hormuz's strategic importance to global energy markets could decline in the aftermath of the Iran conflict, as Gulf countries expand alternative pipeline routes that bypass the chokepoint. Strait of Hormuz

He said Iran's ability to block the passage is a "one-time" leverage point, and that new infrastructure would reduce reliance on the strait. However, he emphasized that while the route may become less critical, the region's role as a major global energy producer will remain unchanged.

Hormuz Closure Drains Oil Reserves

The Strait of Hormuz has been effectively closed since March 1, with the Trump administration repeatedly extending negotiation deadlines without a peace deal in sight. Iran has proposed managing the Strait of Hormuz through an insurance-based model, which would allow it to retain control over the Strait while remaining acceptable to other nations during peacetime.

On Wednesday, Iran allowed some oil shipping to resume through the Strait of Hormuz, with Chinese and South Korean tankers reported crossing after a temporary easing of restrictions. Shipping traffic has begun to recover, rising to about 54 vessels last week, double the previous week, but still remains well below normal pre-war levels of around 140 daily crossings.

The closure of the Strait of Hormuz is causing a rapid depletion of commercial oil inventories, warns Fatih Birol, the chief of the International Energy Agency (IEA). He revealed that strategic oil reserves have supplemented the market with 2.5 million barrels of oil per day. However, he warned that these reserves "are not endless," reported Reuters.

At 2:22 a.m. EST, Brent crude oil was trading 0.85% higher at $88.99 per barrel.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

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