SEATTLE (Oil Monster): Shell plc.- the leading oil and gas trading company warned that a potential shutdown of the Strait of Hormuz as a result of the escalating Israel-Iran conflict would lead to significant disruptions in global trade. Also, the company noted that it has already devised contingency plans to cope with such a situation.
Wael Sawan, Chief Executive Officer, Shell termed Hormuz as artery and said that any block in that artery would have huge impact on global trade of oil and gas. He was speaking at the Japan Energy Summit & Exhibition held in Tokyo.
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Sawan pointed out that the conflict is being closely monitored by the global energy market, especially in the midst of rumors that the U.S. may join Israel in attacks against Iran’s nuclear sites. Although crude prices have surged in reaction to the ongoing crisis situation, the energy flows have so far been not affected. However, the traders continue to remain on high alert, Sawan added.
The Strait of Hormuz has one again become the focus of attention of global energy industry. Iranian leaders have repeatedly threatened to block the passage. If they do so, it will lead to serious consequences, as roughly one-fourth of the world’s oil trades move through the Strait which connects the Persian Gulf to the Indian Ocean. It happens to be the main export route for crude oil and LNG from not only Iran, but also from Saudi Arabia, Iraq, Kuwait and the UAE.
