A pipeline that would allow crude oil from the United Arab Emirates to bypass the Strait of Hormuz separating it from Iran has been delayed because of construction difficulties, two people with knowledge of the matter said.

As many as 270 construction issues have pushed back the completion date, said the two people, declining to be identified because they’re not allowed to speak publicly on the matter. The $3.3 billion project won’t be ready until at least April, one of them said. Abu Dhabi, holder of most of the U.A.E.’s crude reserves, had planned to start exports in January 2011 through the pipeline to a port outside the strait, Dieter Blauberg, the project’s former director, said in May 2009.

U.A.E. Oil Minister Mohamed al-Hamli, confirmed more time is needed to finish it. “It’s a big project, there’s a lot to do.” An official at International Petroleum Investment Co., the pipeline’s owner, declined to say when the project would start when asked by Bloomberg on Jan. 3, and the company didn’t respond to an earlier e-mail seeking comment. China Petroleum Engineering & Construction Corp (CHPECZ)., the pipeline’s contractor, didn’t respond to a fax seeking comment on Dec. 15, and a spokesman for its parent China National Petroleum Corp (CNPZ). declined to comment when Bloomberg contacted him that day by telephone.

The possibility that Iran might try to close the waterway has intensified as Europe prepares to follow tougher U.S. sanctions on the country over its nuclear program.

An average of 14 crude tankers sail each day through the strait, which is 21 miles (34 kilometers) wide at its narrowest point, according to the U.S. Energy Information Administration.

Brent crude, may surge to as much as $200 a barrel for a limited period if Iran halts shipping through the waterway for about two weeks, according to Societe Generale SA. Futures have risen 5.4 percent so far this month to $113.20.

“A credible threat from missiles, mines, or fast attack boats is all that it would take for tanker insurers to stop coverage, which would halt tanker traffic,” wrote Mike Wittner, the bank’s head of oil market research in New York. “We estimate that the probability of this very high impact event at 5 percent.”

Most of the oil exported by Saudi Arabia, OPEC’s biggest producer, as well as crude from Iraq, Kuwait, the U.A.E., Qatar and Iran itself must pass through the waterway, making Hormuz the world’s most important chokepoint, with a daily flow of 17 million barrels a day last year, according to EIA data.

Iran has the ability to block the strait , Joint Chiefs of Staff chairman General Martin Dempsey said in an interview aired on the CBS “Face the Nation” program.

“They’ve invested in capabilities that could, in fact, for a period of time block the Strait of Hormuz,” Dempsey said. 

A potential Hormuz blockade “still remains the ultimate fear in the oil market,” Barclays Plc said in a Jan. 5 note.

Iran plans even bigger military maneuvers in and near the strait next month, the state-run Fars news agency reported on Jan. 5. The drills will be the “greatest naval war games” ever conducted by the elite Revolutionary Guard Corps, Fars said, citing Brigadier General Ahmad Vahidi, the defense minister.

Should Hormuz be sealed off to ships, the pipeline alone won’t prevent price rallies because most of the oil from the Persian Gulf would still be stopped, Kamel al-Harami, an independent oil analyst said by phone from London on Jan. 6.

Weeks of Iran tension has added about $10 a barrel to Brent crude prices, said al-Harami, who was head of crude and products marketing at state-run Kuwait Petroleum Corp. during the 1980s “Tanker War,” when Iran and Iraq attacked each other’s ships.