UAE Bypass Pipeline Halfway Done as Iran's Hormuz Leverage Erodes

UAE Bypass Pipeline Halfway Done as Iran's Hormuz Leverage Erodes ADNOC says a second Fujairah line is nearly half-built, chipping at Iran's grip on a strait that carried a fifth of seaborne oil before the war. ADNOC has built nearly half of a second pipeline designed to route crude around the Strait of Hormuz, chief executive Sultan Ahmed Al Jaber said on Wednesday (2026-05-20). The UAE is already redirecting some barrels through its existing line to Fujairah, which tops out at 1.8 million barrels per day.¹ The build erodes the leverage Iran has held since the strait was effectively shut to commercial traffic. Roughly 20% of the world's oil moved through Hormuz before the war, CNBC reported, and that share is what turned a 50-kilometre channel into a weapon.^3,1 Al Jaber attached hard numbers to the cost of closure. More than 1 billion barrels of oil have been lost since the strait shut, he said, with nearly 100 million additional barrels stranded every week it stays closed.¹ Those losses explain why Gulf producers are pouring money into routes that skirt Iranian waters. The UAE will accelerate construction to double its Fujairah export capacity by 2027, Abu Dhabi's media office said on Friday (2026-05-15), after Crown Prince Sheikh Khaled bin Mohamed ordered ADNOC to fast-track the West-East 1 line.^2,4 Al Jaber framed the bypass as a fix for a lopsided structure. "Right now, too much of the world's energy still moves through too few chokepoints," he said, pointing to a setup in which a couple of hundred armed men across a 50-kilometre stretch can hold a $110 trillion economy hostage.^1,3 There are limits to how fast pipe relieves the squeeze. Even if the conflict ended immediately, Al Jaber said it would take at least four months to ramp flows back to 80% of normal. Fujairah's 1.8 million barrels a day covers only a slice of what Hormuz once carried, and lines do not fill overnight.¹ Iran's bargaining position weakens with every kilometre laid. Both Tehran and Washington have used Hormuz as a chip in a conflict that, almost two months after the strait was shut, has no clear path to resolution, CNBC reported.³ The more crude that reaches open water without crossing the strait, the less a blockade is worth at the table.³ For now the price tape shows little stress. ICE Brent crude front-month sat near $86.80 and Dubai near $86.93 as of Friday's (2026-06-13) close, with the Gulf grade trading roughly in line with the global benchmark rather than at the discount that would flag ample alternative routing. The directional signal leans bearish on Iran's leverage as bypass capacity accumulates.¹ Each kilometre of completed pipe shifts leverage from Tehran toward Abu Dhabi, and the strait's worth as a bargaining chip falls with it. Whether ADNOC clears the halfway mark Al Jaber claimed, and whether Fujairah hits its 2027 doubling, will set how fast that erosion runs.^1,2