Shell chief executive Wael Sawan used his platform at CERAWeek, the annual global energy conference organized by S&P Global, to deliver a direct warning to European energy markets: the Hormuz supply disruption that has already reshaped energy balances across Asia is on course to reach the continent in April.
The conflict that began on February 28 with U.S. and Israeli strikes on Iran has reorganized Asian energy markets in sequence. South Asia absorbed the first blow and implemented demand restriction measures, followed by Southeast Asia, then Northeast Asia. "South Asia was first to get that brunt. That's moved to Southeast Asia, Northeast Asia and then more so into Europe as we get into April," Sawan said in a conversation with Daniel Yergin, vice chairman of S&P Global. Shell is monitoring LNG cargo arrivals — and non-arrivals — in real time.
The supply pressure follows a product cascade. Aviation fuel showed stress first; diesel is next; gasoline would complete the cycle as the Northern Hemisphere summer driving season gets underway. All three products transit — or transited — through the Strait of Hormuz, which handles approximately 20% of global crude and liquefied natural gas (LNG) flows.
Shell's Direct Exposure
What Sawan did not elaborate on at the conference, but which markets have already priced in, is the scale of Shell's direct exposure to damaged Qatari infrastructure.
Shell holds a 30% stake in QatarEnergy LNG and operates the Pearl GTL complex — a gas-to-liquids (GTL) facility at Ras Laffan Industrial City, Qatar's main LNG and petrochemical export hub, and one of the world's largest GTL plants — with a nameplate capacity of 140,000 barrels of oil equivalent per day (boe/d). Iranian strikes damaged Train 2 — with repair timelines estimated at a minimum of one year — while Train 1 sustained no damage, forcing a full suspension of operations pending damage assessment.
Shell — widely regarded as the world's largest LNG trader — has also declared force majeure on the cargoes it purchases from QatarEnergy and markets to customers globally, a volume analysts estimate at 6.8 million tonnes per annum (MTPA).
Qatar's overall position is more severe. The strikes destroyed 17% of the country's LNG export capacity — 12.8 MTPA removed from service for an estimated three to five years, according to Saad Al-Kaabi, QatarEnergy's chief executive and Qatar's minister of state for energy affairs — with force majeure declared on long-term contracts with Belgium, China, Italy, and South Korea. Al-Kaabi estimated annual revenue losses at $20 billion and said the scale of the damage had set the region back between ten and twenty years.
Energy Security as National Security
Sawan told the conference that Shell is actively working with governments to identify available levers: demand-side measures, storage strategies, and forward stock procurement. "Countries cannot have national security without energy security," Sawan said, before a CERAWeek audience spanning delegates from 89 countries.
Sawan also outlined the operating discipline he has instilled in his teams. "We need our people to deal with the here and now. But we also need to be thinking three months out, 12 months out, and eventually five to ten years out, when we think about the broader energy system and the longer-term implications of the current crisis towards that," he said.
Venezuela: The Long-Range Move
In that same forward-looking register, Sawan said Shell is assessing where it can add value in Venezuela, with the initial focus on natural gas — specifically volumes that can be monetized through LNG. The vehicle is the offshore Dragon project, which Shell is advancing to liquefy Venezuelan gas in Trinidad and Tobago, Venezuela's eastern neighbor and an established Caribbean LNG exporter with existing liquefaction infrastructure. Shell is also assessing an eventual return to LNG in Argentina — whose Atlantic export routes bypass the Strait of Hormuz and the Suez Canal entirely, making it a structurally differentiated supply source in a crisis defined by Persian Gulf chokepoint risk.
The move comes as the search for alternative LNG sources accelerates across the industry. With Qatar running at partial capacity for years and the Persian Gulf corridor under constraint, Venezuela — historically sidelined for political risk and sanctions exposure — is back on the map at a moment when waiting for Qatar to recover could take half a decade.
CERAWeek as Barometer
Other voices at the conference reinforced Sawan's diagnosis. Chevron chairman and chief executive Mike Wirth said the disruption is more severe than what followed Russia's invasion of Ukraine in 2022. "We've got a lot of oil and gas now that is not flowing into the market," Wirth said. "And so there really is a difference in terms of physical supply this time versus what we've seen in prior incidents."
Paul Sankey, a senior advisor at Oliver Wyman and former International Energy Agency (IEA) analyst, said he has not seen this level of disruption since the 1973 oil crisis. "The situation is extremely grave, as I would describe it," Sankey said at a panel Tuesday morning. "Every day that passes, the shortage is going to get worse."
ConocoPhillips chief executive Ryan Lance put the arithmetic plainly: "You just can't take eight to 10 million barrels a day of oil and 20 per cent or so of the LNG market off the world stage without significant regressions," he said.
Brent crude was trading at approximately $102.50 per barrel during Tuesday's session. At the margins of the conference, the debate had moved past whether the disruption is real. It was about how long it can be sustained.