Sultan Al Jaber, CEO of Abu Dhabi National Oil Company (ADNOC), delivered a speech at the ADIPEC 2026 energy conference in Abu Dhabi, providing a systematic assessment of the impact of the Strait of Hormuz shipping disruption on global energy supply chains. He pointed out that since the US-Israel war with Iran disrupted shipping through the Strait of Hormuz, global oil inventories have been drawn down by nearly 1 billion barrels, with diesel inventories in some markets falling to the lowest seasonal level in 35 years, while other markets face a liquefied natural gas supply gap of 600 billion cubic feet.
The most core data disclosed by Al Jaber is the dramatic shift in shipping cost proportions. He stated that before the conflict, shipping and logistics costs accounted for less than 5% of a barrel of oil's value; today, that proportion has exceeded 30%. This figure directly quantifies the "delivery end" pressure brought about by the Strait of Hormuz crisis, altering the cost structure of the global energy trade. He emphasized: "Energy security is no longer measured solely at the production end, but also at the delivery end.".
Against this backdrop, Brent crude oil prices are hovering around $110 per barrel, an increase of approximately 50% from February before the war. The rise in diesel prices has been even more severe, with multiple markets recording historic highs, posing inflationary and cost-of-living threats to governments and consumers. Al Jaber candidly stated: "Simply put, the world has eroded its supply buffers."
Al Jaber called for a reshaping of energy security frameworks, proposing five priority actions: expanding strategic reserves and product inventories, deploying flexible refining capacity closer to consumer markets; strengthening transportation routes and logistics networks; developing intelligent energy systems capable of anticipating risks; maintaining policy, financing, and insurance support to stabilize investor confidence; and investing in talent development. He particularly stressed the need for infrastructure construction to precede crises rather than respond after the fact.
This crisis originated from the US-Israel war with Iran that broke out on February 28, 2026, which severely affected navigation safety in the Strait of Hormuz, a key chokepoint carrying approximately one-fifth of global oil trade. The International Energy Agency has agreed in October to release over 20 million barrels of diesel, in addition to the record emergency reserve release commitment made in March, to ease market tightness.
Al Jaber also stated that the UAE's ability to respond to this disruption stems from years of investment in energy infrastructure, logistics, technology, and talent. "We did not write our resilience playbook during this disruption; we wrote it years ago." This statement implicitly contrasts the different performance of energy systems with varying levels of preparedness when facing the same supply chain shock.
For India, this data carries direct implications. As one of the world's largest crude oil importers, India's energy import costs are being pushed up by the surge in shipping costs. Indian shipping companies and refiners face not only rising freight rates but also delivery uncertainty caused by rerouting and risk premiums. India's state-owned refiners such as Petronet LNG are already seeking early delivery of Qatari cargoes to address the risk of Hormuz disruption, indicating that the South Asian economy is taking concrete measures to respond to this supply chain crisis.