Energy Shortages May Last Into 2027 Due to Strait of Hormuz Blockade
Shell CEO Wael Sawan says that the blockade of the Strait of Hormuz may lead to energy shortages lasting into 2027, citing low oil and liquefied natural gas levels.
The shortage is due in part to the war between the US and Iran, which has blocked 20% of the world's oil and natural gas from passing through the Persian Gulf. This has forced countries like Iraq, Kuwait, and Qatar to shut down production and pushed customers to bid up prices elsewhere.
Brent crude climbed 2.8% to $111.19 a barrel as talks between the US and Iran showed little sign of progress. Sawan noted that the shortage is not just limited to oil but also affects liquefied natural gas, which plays a significant role in Shell's business.
Shell has been working on diversifying its production by acquiring Canadian shale producer ARC Resources Ltd. for $13.6 billion, its biggest deal in over a decade. The acquisition aims to support production growth through 2030 and supply its LNG Canada facility, which exports natural gas to Asia.