Shipping now eats 30% of a barrel’s cost, says ADNOC's Al Jaber

Abu Dhabi: Global energy security must be measured by delivery, not production alone, says Dr. Sultan Ahmed Al Jaber at the opening of ADIPEC 2026 in Abu Dhabi on November 2.

The UAE Minister of Industry and Advanced Technology and ADNOC Managing Director and Group CEO, told delegates that the industry must rethink how it builds, protects and delivers energy going forward. This after a year of disruption has exposed weak points in supply chains.

Nearly one billion barrels of crude have drained from global inventories since the disruption in the Strait of Hormuz, Al Jaber reports. Diesel stocks in some markets sit at their lowest seasonal level in 35 years. Others face a 600 billion cubic feet LNG supply gap. “The world has eroded its supply buffers,” he says.

Delivery costs have also jumped. Logistics accounted for less than 5 per cent of a barrel’s cost before the disruption. They now exceed 30 per cent.

Al Jaber outlined five steps the energy industry can take to reduce the impact of future shocks. “First, accessible supply. We need expanded strategic storage, larger stockpiles of products and flexible refining capacity closer to consumer markets.

“Second, routes to market. Supply only counts when it arrives. Infrastructure must be built before it is needed and enabled by advanced logistics.

“Third, operational intelligence. Moving from automated operations to intelligent energy systems that anticipate risk, optimize performance and drive down the cost of every barrel.

“Fourth, capital follows confidence. Policy must create it, finance must accelerate it and insurance must keep trade moving.

“Fifth, which is in my view the most important, is people. Because behind every barrel that arrives is a person who made sure it did. Systems don’t carry responsibility, people do. “

UAE resilience

Al Jaber argued the UAE wrote its resilience playbook years before the disruption. He gave examples of ADNOC’s integrated trading, investment in people, world-class logistics and the global gas, chemicals and energy solutions portfolio of XRG. The result is an end-to-end, AI-enabled operating model. ADNOC aims to become the most "customer-centric energy company on earth".

The country held its footing under pressure, he said. “Talent stayed. Capital stayed. Investment kept coming and the economy kept moving.” He also stresses that the UAE will advocate for dialogue, active diplomacy and political solutions that stabilise markets and energy flows.

His closing line carried the message to partners. “When it counts the most, you can count on the UAE.”