Shell warns of unprecedented global energy crisis from Hormuz blockade

07:55

By: Dakir Madiha

Shell warns of unprecedented global energy crisis from Hormuz blockade

Wael Sawan, chief executive of Shell, has warned that the blockage of the Strait of Hormuz is driving a severe shock across global energy supply chains. The disruption comes amid escalating tensions involving Iran, the United States, and Israel, which have destabilised one of the world’s most critical energy corridors. Around 10% of global oil production and nearly 20% of liquefied natural gas flows are currently affected.

The crisis has extended beyond the Gulf region, with widespread consequences emerging after 100 days of sustained disruption. Several Asian economies, including Vietnam, Indonesia, and Thailand, have introduced rationing measures to manage constrained energy imports. India is also facing mounting pressure on its energy systems, while Pakistan and the Philippines have reduced working weeks in response to ongoing shortages.

Authorities in Tehran face accusations of contributing to the effective paralysis of the maritime route, which normally handles close to 20 million barrels of oil per day. Despite occasional signals of potential de-escalation, continued military strikes and retaliatory actions between involved powers have deepened instability. Political statements expressing optimism about a rapid resolution have not translated into concrete improvements on the ground.

Even in the event of reduced tensions, analysts expect a prolonged recovery period for global markets. Damage to key infrastructure, including facilities at Ras Laffan in Qatar, a major liquefied natural gas hub, has added further strain to supply restoration efforts. Repair operations are underway, but full capacity is not expected to return for several months, while market rebalancing could take more than a year.