Shell CEO Wael Sawan said on Thursday the oil and gas major was being “very careful” with its shipping through the Middle East given the escalating conflict between Israel and Iran.
The Iran-Israel air war entered a seventh day on Thursday with President Donald Trump keeping the world guessing on whether the United States will join the fighting.
“The escalation in tensions over the last few days, in essence, has added to what has already been significant uncertainty in the region,” he told an industry conference in Tokyo.
“We’re being very careful with, for example, our shipping in the region, just to make sure that we do not take any unnecessary risks.”
About 20% of the world’s oil and fuel flows through the Strait of Hormuz, a crucial waterway in the Middle East, and Sawan said what was particularly challenging was electronic interference disrupting commercial ship navigation systems.
“The Strait of Hormuz is, at the end of the day, the artery through which the world’s energy flows, and if that artery is blocked, for whatever reason, it’ll have a huge impact on global trade,” he said.
Sawan said the rise in oil and gas prices in recent days has been “moderate” as investors wait to see whether physical infrastructure might be damaged. Oil prices have risen to their highest levels in more than two months this week.
Shell is closely monitoring the possibility of U.S. military action and has plans in place should things deteriorate, he said.
(Reporting by Kathleen Benoza and John Geddie)
