Europe could face a shortage of energy and fuel as soon as next month without a reopening of the Strait of Hormuz, Shell’s chief executive has warned. Wael Sawan said the crisis, now in its fourth week, has already affected supplies of jet fuel, with diesel and petrol likely to come under pressure next as the summer driving season begins in the US and Europe.
Oil prices dipped to about $100 a barrel on Wednesday from highs of $114 at the start of the week, following reports that the White House had sent a 15-point peace plan to Iran’s leaders. However, without a return of crude deliveries from the Gulf via the crucial Hormuz channel, Europe could face shortages within weeks, according to Sawan.
Speaking at an oil industry conference in Texas, Sawan said: “South Asia was first to get that brunt. That’s moved to south-east Asia, north-east Asia and then more so into Europe as we get into April.” The warning echoed Germany’s economy minister, Katherina Reiche, who told the same conference that energy supply scarcity could occur in late April or May if the conflict continued.
The looming threat could lead to a prolonged global economic recession if oil hits $150 a barrel, according to Larry Fink, boss of BlackRock. In an interview with the BBC, Fink outlined two scenarios: one where a resolution allows oil prices to return to pre-crisis levels of about $70 a barrel, and another where the conflict drives prices to record highs, resulting in “a probably stark and steep recession”.
A British government spokesperson said: “The UK has diverse and resilient energy supply. We continue to work with partners on the international situation.”
