Energy Security Overhaul Urged as Global Oil Inventories Plummet by Nearly a Billion Barrels

The disruption of shipping routes through the Strait of Hormuz has led to a depletion of nearly one billion barrels from global oil inventories, highlighting the urgent need for a fundamental reassessment of energy security, according to discussions at the Adipec conference in Abu Dhabi on Monday. Dr. Sultan Al Jaber, UAE Minister of Industry and Advanced Technology and the managing director and group chief executive of Adnoc, stated, “Simply put, the world has eroded its supply buffers. But, trust me, supply is only half the story. The other half is delivery.”

During the event's opening ceremony, Dr. Al Jaber called for increased investment in supply infrastructure and artificial intelligence to bolster the energy industry's resilience against future shocks. He cautioned that merely securing production is no longer sufficient to ensure supplies reach consumers. Addressing OpenAI chief executive Sam Altman, who was present, Dr. Al Jaber remarked, “Sam, from the moment ChatGPT was born, the world has asked what energy can do for AI. And now, together, we will find out what AI can do for energy.”

This announcement coincided with Adnoc revealing an agreement with OpenAI and G42 to become the first energy company globally to implement OpenAI's Frontier platform. The initiative aims to enhance Adnoc's field development, well management, and commercial operations. This partnership, overseen by Sheikh Khaled bin Mohamed, Crown Prince of Abu Dhabi, is expected to make Adnoc's systems more intelligent, secure, resilient, and productive.

Dr. Al Jaber further noted that the conflict in Iran had significantly disrupted energy flows via the Strait of Hormuz, exposing vulnerabilities in global supply chains. He explained, “For years, our industry optimised for just in time. And to tell you the truth, we got very good at it. This year we got the bill for just in case.” He pointed out that diesel stocks in certain markets have reached their lowest seasonal levels in 35 years, while others face a substantial gap in LNG supplies, estimated at 600 billion cubic feet.

Shipping and logistics costs, which previously constituted less than 5% of a barrel's cost, now exceed 30% due to the disruptions. “Energy security is not only measured at the point of production. It is now also measured at the point of delivery,” Dr. Al Jaber emphasized.

He outlined five key priorities for enhancing energy security: accessible supply, effective routes to market, operational intelligence, investment confidence, and human talent. He also advocated for intelligent energy systems capable of proactively identifying risks, improving performance, and reducing costs. Regarding investment, he stated, “Capital follows confidence. Policy must create it…finance must accelerate it…and insurance must keep trade moving.”

Dr. Al Jaber affirmed that the UAE would persist in promoting dialogue, diplomacy, and political solutions to foster stability in energy markets and the global economy. He highlighted the UAE's model: “Talent stayed. Capital stayed. Investment kept coming… and the economy kept moving. That is the UAE model, pressure-tested and proven by results.” He added that Adnoc's readiness for such disruptions was established years prior. “We did not write our resilience playbook during this disruption. We wrote it years before,” he said. “Energy leadership is not measured by what you produce in good times. It is measured by what you deliver in hard times. Because when it counts the most. You can count on the UAE.”