ABU DHABI: Nearly one billion barrels of crude oil have been withdrawn from global inventories since disruptions in the Strait of Hormuz, while shipping and logistics costs have surged, prompting calls for a major overhaul of global energy security systems, UAE Minister of Industry and Advanced Technology and ADNOC Managing Director and Group CEO Dr Sultan Ahmed Al Jaber has said.
Thank you for reading this post, don't forget to subscribe!Addressing the opening of ADIPEC 2026 in Abu Dhabi, Al Jaber warned that recent disruptions had exposed serious vulnerabilities in international energy supply chains, placing unprecedented pressure on inventories, transportation networks and the ability to deliver energy supplies to consumers.
He said diesel inventories in some markets had fallen to their lowest seasonal levels in 35 years, while other markets were facing a liquefied natural gas (LNG) supply shortfall of around 600 billion cubic feet.
“Simply put, the world has eroded its supply buffers,” Al Jaber said.
The disruption comes amid the US-Israeli war on Iran, which began on February 28 and has severely affected shipping through the Strait of Hormuz, one of the world’s most important routes for global oil and gas supplies.
Shipping and Logistics Costs Surge
Al Jaber said shipping and logistics costs had increased from less than 5 per cent of the cost of a barrel of oil before the disruption to more than 30 per cent, fundamentally changing the economics of energy security.
“Supply is only half the story. The other half is delivery,” he said.
He stressed that energy security could no longer be assessed solely on the basis of production capacity, but must also account for the reliability of transportation and the ability to deliver supplies to end consumers.
Diesel prices in several markets have surged to record levels amid wartime supply disruptions, raising concerns over inflation and increasing costs for consumers and businesses.
Brent crude was trading at around $110 per barrel on Monday, approximately 50 per cent higher than its level before the conflict began in February.
IEA Moves to Release Emergency Fuel Supplies
In October, the International Energy Agency (IEA) agreed to release more than 20 million barrels of diesel, alongside any remaining oil from a record emergency reserves release pledged in March, to increase market supplies and ease price pressures.
Saudi Aramco Chief Executive Officer Amin Nasser also warned last month that global commercial oil inventories had fallen below six billion barrels, with a significant portion of the remaining stocks not readily available.
These developments underscore mounting pressure on international energy markets as governments and producers seek to maintain supply flows and minimise the economic consequences of prolonged disruptions.
Five Priorities for Strengthening Energy Security
Al Jaber outlined five key priorities for building a more resilient global energy system.
The first is to expand strategic storage, increase product stockpiles and develop flexible refining capacity closer to consumer markets.
The second focuses on strengthening routes to market through reliable infrastructure and advanced logistics networks.
The third involves developing intelligent energy systems capable of anticipating risks, optimising performance and reducing production costs.
The fourth highlights the importance of supportive policies, financing and insurance mechanisms to maintain investor confidence and ensure international energy trade continues during periods of disruption.
The fifth and most important priority, according to Al Jaber, is investment in people and skilled workers who are essential to maintaining safe, reliable and uninterrupted energy operations.
He emphasised that investment in infrastructure and human capabilities must take place well ahead of future crises rather than in response to them.
UAE’s Energy Resilience Built on Long-Term Investment
Al Jaber said the UAE’s ability to manage recent disruptions reflected years of investment in energy infrastructure, logistics, technology and human capital.
“We did not write our resilience playbook during this disruption. We wrote it years before,” he said.
He highlighted ADNOC’s integrated trading operations, advanced logistics capabilities and XRG’s international portfolio spanning gas, chemicals and energy solutions as examples of the UAE’s long-term strategy to strengthen energy resilience.
He also praised the UAE Armed Forces, Civil Defence, firefighters, first responders and ADNOC frontline employees for their efforts during the recent disruptions.
Al Jaber reaffirmed that the UAE would continue supporting dialogue, active diplomacy and political solutions to promote stability in energy markets and the wider global economy.
ADIPEC 2026 Expects Record International Participation
Held under the patronage of UAE President Sheikh Mohamed bin Zayed Al Nahyan and hosted by ADNOC, ADIPEC 2026 is expected to attract more than 239,000 participants from over 170 countries.
The opening ceremony took place at the Abu Dhabi Energy Centre, while the exhibition and conference are being held at ADIPEC Centre Abu Dhabi until November 5.
The event brings together 40 government ministers, more than 2,250 exhibiting companies, approximately 1,800 speakers and 30 country pavilions.
Its programme features over 380 sessions involving government officials, energy executives, investors and industry experts to discuss energy security, investment opportunities and technological innovation.
The opening address was delivered in the presence of Sheikh Mansour bin Zayed Al Nahyan, UAE Vice President, Deputy Prime Minister and Chairman of the Presidential Court.
Al Jaber said decisions being made today regarding energy infrastructure, investment and international partnerships would shape the global energy landscape over the next decade.
“The choices we make today will determine the energy landscape a decade from now,” he said.
