The blockade of the Strait of Hormuz has led to global energy disruptions “never seen before”, the chief executive of British oil giant Shell said Wednesday. More than 10 per cent of global oil production has been removed from the market since the start of the Middle East war, Wael Sawan told a summit of top business leaders hosted by the Wall Street Journal.
He said the impacts are “disproportionately painful” in Asia, where countries including India, Indonesia, Thailand, and Vietnam have resorted to fuel rationing. Pakistan and the Philippines, meanwhile, have implemented four-day working weeks. READ ALSO: Shell Identifies Strategic Pathways For Nigeria To Advance Gas Utilisation The crucial Strait of Hormuz has been effectively shut since US and Israeli attacks on Iran in late February, blocking roughly a fifth of global oil supplies and rattling global markets.
Iran and the United States exchanged fresh strikes this week, straining a fragile ceasefire that took effect in April. That cast doubt on US President Donald Trump’s claim that negotiations on an enduring settlement to end the war were in their “final throes”. READ ALSO: US Consumer Inflation Hits Fresh Three-Year High In May Sawan warned that even if the war ends soon, rebalancing the global energy system could take nearly a year, if not longer.
While soaring oil prices helped boost Shell’s net profit in the first quarter, the company warned the conflict was weighing on its gas production. The Ras Laffan LNG hub — the world’s largest — has suffered particularly significant damage from strikes on Qatar.