The oil and gas supply crisis caused by the effective closure of the strait of Hormuz has already led to energy rationing in Asian countries. Photograph: Dado Ruvić/ReutersThe oil and gas supply crisis caused by the effective closure of the strait of Hormuz has already led to energy rationing in Asian countries. Photograph: Dado Ruvić/ReutersEurope could face Iran war fuel rationing by April, says Shell bossWael Sawan says energy shortages on way if strait of Hormuz does not reopen to oil and gas shipping
Europe could face energy shortages and fuel rationing as soon as next month without a reopening of the strait of Hormuz, Shell’s chief executive has said.
The boss of Europe’s biggest oil company said it was working with governments to help them address the oil and gas supply crisis, which has already led to energy rationing in Asian countries.
Oil prices dipped back to about $100 a barrel on Wednesday from highs of about $114 at the start of the week, on the back of reports that the White House has sent a 15-point peace plan to Iran’s leaders.
However, without a return of crude deliveries from the Gulf to global buyers via the crucial Hormuz channel, Europe could face shortages of fossil fuels within weeks, according to Wael Sawan.
Sawan made the comments at an energy conference in Houston, Texas. Photograph: Danielle Villasana/ReutersThe Shell boss told a major oil industry conference in Texas: “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.”
Sawan said the crisis, now in its fourth week, had already affected supplies of jet fuel – which has doubled in price since the start of the conflict – and he predicted diesel would come under pressure next, followed by petrol as the summer driving season begins in the US and Europe. He said shortages could begin in Europe as soon as April.
The stark warning echoed Germany’s economy minister, Katherina Reiche, who also warned at the same industry conference that energy supply scarcity could occur in late April or May if the conflict continues.
She added that Germany’s decision to phase out nuclear energy was a huge mistake and that greater imports of gas via super-chilled tankers from overseas would be an important part of the solution.
The looming threat to Europe’s energy supplies could lead to prolonged global economic recession if oil hits $150 a barrel, according to the boss of the US financial company BlackRock.
In an interview with the BBC, Larry Fink, who leads the world’s largest asset manager, said if Iran “remains a threat” and oil prices stay high it will have “profound implications” for the world economy.
Although it is too early to determine the full scale and outcome of the conflict, Fink outlined two scenarios: one in which a full resolution of the conflict allows oil prices to return to pre-crisis levels of about $70 a barrel, and another in which the conflict drives prices to record highs.
There could be “years of above $100, closer to $150 oil, which has profound implications in the economy” and an outcome of “a probably stark and steep recession”.
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