August could become a critical turning point for global oil prices if fuel demand strengthens while the supply disruption caused by the Iran war continues, ADNOC executive vice president for sales and trading Philippe Khoury said on Tuesday at the Middle East Petroleum and Gas Conference in London.
Khoury warned that oil supply chains may require up to a year to fully recover even after flows resume, with transit through the Strait of Hormuz expected to remain below pre-war levels due to ongoing uncertainty over regional stability.
The Strait of Hormuz, which handled about one-fifth of global oil supplies before Iran effectively shut it following the outbreak of the U.S.-Israeli conflict in February, has been at the centre of what industry leaders describe as the largest energy supply disruption on record.
According to Khoury, economies have responded to higher energy costs by reducing fuel consumption, helping keep crude prices near $100 per barrel. However, a recovery in demand combined with prolonged supply constraints could push prices significantly higher in the coming months.
He said it remains unclear how much further global demand can contract, adding that the outlook for oil markets remains highly uncertain amid continuing geopolitical tensions.
The ADNOC executive also highlighted severe disruptions across energy-related supply chains, including jet fuel, liquefied petroleum gas, chemicals, fertilisers and sulphur. He noted that Middle Eastern producers typically supply up to 45% of Europe’s jet fuel needs, with those flows now heavily constrained.
Khoury said the supply shortage is so severe that airlines could face operational challenges even if they have hedged fuel prices, as physical availability rather than cost has become the primary concern.
On the demand side, he said Chinese consumption has been weaker than expected but is beginning to recover, supported by buying interest from independent refiners, while India has remained a major purchaser throughout the crisis.
He added that ADNOC has restored a substantial portion of its production and continues to utilise infrastructure that allows crude exports to bypass the Strait of Hormuz.
Abu Dhabi is also expanding its export resilience, with ADNOC developing a second pipeline that will double crude export capacity outside the strait by 2027, strengthening the UAE’s ability to maintain supplies during prolonged regional disruptions.