ADNOC says second Hormuz bypass pipeline is half built as 1 billion barrels lost

ADNOC says second Hormuz bypass pipeline is half built as 1 billion barrels lost Near-total closure of the Hormuz chokepoint is pushing Gulf producers to fast-track export routes that skirt the waterway. ADNOC said on Wednesday (2026-05-20) it has built nearly 50% of a second pipeline that will bypass Hormuz, as the near-total closure of the waterway entered its third month.¹ The existing backup route, ADNOC's 1.5-million-barrel-per-day pipeline to the Fujairah terminal on the Gulf of Oman, has been pushed to a maximum 1.8 million b/d as the company redirects flows. More than 1 billion barrels of oil have been lost since the waterway was shut to commercial traffic, ADNOC CEO Sultan Ahmed Al Jaber said, with nearly 100 million more lost for every week the blockade holds.¹ Al Jaber warned it will take at least four months to lift oil flows back to 80% of normal levels even if the U.S.-Iran conflict ends immediately. That timeline assumes the waterway reopens and that war damage to infrastructure can be repaired without fresh disruption.^1,3 The damage runs beyond crude. Reduced export infrastructure and the blockade have curtailed LNG supply, pushing prices above $25 at the peak, with analysts now expecting elevated levels to persist for several years.^5,4 Iran has officially agreed to reopen the waterway for safe passage, but maritime traffic remains close to a standstill, according to reports. The obstacle is insurance. Unprecedented hurdles and new geopolitical demands are blocking any return to normal commercial shipping.⁶ The UAE project is the most concrete response yet from a Gulf producer. The country already links its onshore fields to Fujairah with that 1.5-million-b/d line, and the second pipeline will add capacity, though ADNOC has not disclosed a target volume.^2,1 The EIA estimates around 3.5 million b/d of effective unused pipeline capacity exists across the region to route oil around the waterway. In 2022, 21 million b/d, equal to about 21% of global petroleum liquids consumption, transited the chokepoint, with 82% of crude bound for Asian markets.² Traders first expected disruptions to last days, not weeks. The tape has since repriced for a prolonged outage. ICE Brent crude front-month stood at $80.38 as of Friday's close (2026-06-19), reflecting both the embedded risk premium and the recognition that supply will not return soon.⁷ [LIVE PRICES] Before the conflict, analysts expected LNG supply to grow strongly this year. Instead, attention turns to whether the summer cooling season will force importers to bid up for scarce spot cargoes.⁴ What stays unresolved is whether a ceasefire on paper becomes a functional reopening. That hinges on underwriters, not diplomats, and so far the risk is not being written.^6,1