Shell Plc Chief Executive Officer Wael Sawan said oil and liquefied natural gas shortages caused by the Strait of Hormuz blockade could continue for months and potentially into next year.
“We are talking about roughly 900 million barrels that haven’t been produced in the last couple of months and that’s been replaced essentially by stock drawdown,” Sawan said in an interview with Bloomberg TV. “We’re now starting to reach some relatively low levels. We’re talking about demand curtailment in certain areas. We’re talking about fuel switching.”

Sawan noted the impact extends beyond oil to liquefied natural gas markets.

Shell agreed this week to acquire Canadian shale producer ARC Resources Ltd. for $13.6 billion, marking its largest deal in over a decade. The purchase will support production growth through 2030 and help supply its LNG Canada facility, which exports natural gas to Asia.

Sawan said Shell had been evaluating ARC for two years before the war with Iran. The CEO stated supply-demand balances are “going to be tight for at least the coming months, if not the next year-plus, given recent disruptions.”

About 20% of global oil and natural gas cannot pass through the Persian Gulf, forcing countries including Iraq, Kuwait and Qatar to halt production. Customers, particularly in Asia, are competing for alternative supplies by bidding up prices.
Source: Investing.com