Europe could face fuel shortage by April as Iran throttles supplies, says Shell boss | Energy industry
Europe could face energy and fuel shortages next month if the Strait of Hormuz is not reopened, Shell’s CEO said.
The boss of Europe’s biggest oil company said he was working with governments to help them resolve the oil and gas supply crisis that has led to energy rationing in Asian countries.
Oil prices fell to around $100 a barrel on Wednesday from peaks of around $114 earlier in the week following news that the White House had sent a 15-point peace plan to Iran’s leaders.
But Europe could face fossil fuel shortages within weeks if crude oil deliveries from the Gulf via the crucial Hormuz canal to global buyers do not return, according to Wael Sawan.
Shell’s boss told a major oil industry conference in Texas: “South Asia was the first to take that hit. As we moved into April, it moved to southeast Asia, northeast Asia and then Europe.”
The crisis, now in its fourth week, has already affected supplies of jet fuel, which has doubled in price since the start of the conflict, and diesel could come under pressure from now on, followed by gasoline as the summer driving season begins in the US and Europe, Sawan said.
This dire warning echoed that of German Economy Minister Katherina Reiche, who warned at the same industry conference that energy supply shortages could occur in late April or May if the conflict continues.
He added that Germany’s decision to phase out nuclear power was a big mistake and that importing more gas from abroad via super-cooled tankers would be an important part of the solution.
The looming threat to Europe’s energy supplies could lead to a prolonged global economic recession if oil hits $150 a barrel, according to the boss of US financial firm BlackRock. Larry Fink, head of the world’s largest asset manager, said in an interview with the BBC that if Iran “remains a threat” and oil prices remain high, this will have “profound effects” on the world economy.
Although it is too early to determine the full extent and outcome of the conflict, Fink outlined two scenarios: One in which a full resolution of the conflict would allow oil prices to return to pre-crisis levels of $70 per barrel, and the other in which the conflict would push prices to record levels.
It could be the result of “years of oil above $100, near $150, with profound effects on the economy” and “possibly a sharp and steep recession.”
