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Shell CEO warns global oil supply crunch could persist until 2027

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The global oil market is facing a high-scale supply shock, with rising fuel prices continuing to impact drivers at the pump on a daily basis.

In an interview with Bloomberg, Shell CEO Wael Sawan issued one of the most direct warnings to date regarding the risks the blockade of the Strait of Hormuz poses to global energy supplies.

Sawan stated that approximately 900 million barrels of oil have gone unproduced over the last several months. The CEO noted that this loss of production has primarily been offset through the drawdown of existing inventories.

As global emergency reserves are depleted to close a persistent production deficit, Sawan indicated he does not hold an optimistic outlook on how quickly this situation might change. He emphasized that supply-demand balances are certain to remain tight in the coming months and potentially for more than a year.

The warning coincided with Shell’s announcement of its $13.6 billion acquisition of Canadian shale producer ARC Resources. This transaction provides significant insight into where one of the world’s most complex energy companies perceives the future of oil supply to lie.

The figures underpinning Sawan’s warnings reveal the scale of the crisis. According to Sawan, the blockade of the Strait of Hormuz has effectively removed approximately 900 million barrels from global supply in recent months. This void has not been filled by alternative production; instead, it has been absorbed by eroding inventories that were not designed to withstand such a prolonged and uninterrupted disruption.

With global inventories already under pressure, Sawan’s warning that the supply crunch could extend until 2027 reflects the potential trajectory of inventory depletion should the blockade persist.

The impact of this market tightness is expected to be reflected directly at the pump. It was noted that pressures on oil prices typically translate into gasoline prices with a lag of several weeks. This implies that even if the initial shock of the conflict with Iran has been weathered, the full effect may not yet have been realized.

According to data previously published on April 21, Goldman Sachs’ March 2026 US inflation guidance estimated that spot oil prices rose from $71 per barrel in February to $103 in March. While the bank’s base-case scenario forecasts Brent oil retreating toward $80 by the fourth quarter of 2026, it warned that risks remain skewed to the upside.

Shell’s operational update for the first quarter of 2026 confirms the extent of the disruption. Integrated Gas production is expected to decline to a range of 880,000 to 920,000 barrels of oil equivalent per day, down from 948,000 barrels in the fourth quarter of 2025. This decrease is attributed in part to the impact of the Middle East conflict on Qatari volumes.

While Sawan voiced these supply warnings, Shell simultaneously executed a major investment demonstrating its commitment to long-term reserve security. According to a company statement, Shell has agreed to acquire Canadian shale producer ARC Resources in a deal totaling $13.6 billion, which includes the assumption of approximately $2.8 billion in debt.

The transaction, financed approximately 25% in cash and 75% in stock, includes the following assets: daily production of approximately 370,000 barrels of oil equivalent, roughly 2 billion barrels of reserves, and a significantly expanded position in Canada’s Montney Basin. This move establishes Canada as a strategic hub for Shell’s upstream exploration and production activities.

Sawan stated that the acquisition transforms Canada into a core hub for Shell, reinforcing the strategy to deliver “more value with less emissions.” The CEO emphasized that the ARC acquisition strengthens the company’s resource base for decades to come.

According to Sawan, Shell had been evaluating ARC Resources for two years prior to the start of the war. He noted that the acquisition was not a panic-driven move resulting from the Strait of Hormuz crisis, but rather a pre-planned strategic decision. However, he acknowledged that the current supply environment has rendered the timing highly opportune. The company expects the deal to deliver double-digit returns and to increase free cash flow per share starting in 2027.

Diplomacy

South Korea pulls part of embassy staff from Ukraine amid POW dispute

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The South Korean government has decided to withdraw part of its embassy staff from Ukraine.

According to the Yonhap news agency, Foreign Ministry spokesman Park Doo-sun cited the Kyiv administration’s failure to take “positive steps” in the dispute that began with the leak of information concerning the handover of North Korean prisoners of war as the justification for the move.

The spokesman also listed the ongoing threat of air strikes, which complicates the safety of diplomats, among the reasons.

Following the withdrawal of part of the personnel, essential diplomatic contacts will continue under the leadership of the charge d’affaires ad interim to Ukraine. All consular staff tasked with protecting South Korean citizens will remain in Ukraine.

Prior to this move, the Seoul administration decided on 8 October to withdraw its ambassador. The Foreign Ministry stated at the time that it was ready to continue consultations with Kyiv to resolve the emerging issues constructively.

Tensions between the two countries began with a speech delivered by Ukrainian President Volodymyr Zelenskyy at the United Nations General Assembly in September.

Zelenskyy announced that two captured soldiers from the North Korean army had been handed over to South Korea.

South Korean President Lee Jae-myung, meanwhile, accused Kyiv of breaching a confidentiality agreement.

Lee said the disclosure of this information endangered the prisoners’ families and stability on the Korean Peninsula.

Seoul expects a public apology

Dmytro Lytvyn, an adviser to the Ukrainian president, denied the existence of a confidentiality agreement.

The South Korean Foreign Ministry summoned Ukrainian Charge d’Affaires Andriy Veshkin on 28 September and issued a note of protest against Lytvyn’s remarks.

President Lee Jae-myung warned in a statement on 2 October that they would take additional measures against Kyiv if Ukrainian authorities did not acknowledge the agreement and make a public apology. Lee stated that Ukraine itself had initially requested that the transfer of the prisoners be kept confidential.

Ukrainian Foreign Ministry spokesman Heorhii Tykhyi said the dispute stemmed from differing interpretations of the confidentiality regime.

Tykhyi noted that Seoul, based on its constitution which recognises the entire Korean Peninsula as its own territory, requested that the prisoners be handed over “like its own citizens”.

Describing the handover as a “gesture of goodwill”, Tykhyi stated that they were conducting closed-door negotiations to resolve differences of opinion.

Ambassador Park Ki-chang returned to Seoul on 10 October. According to a report by The Korea Times newspaper citing the ministry, recalling the ambassador served as a diplomatic protest against the leak of information regarding the prisoners.

The newspaper wrote that South Korea had last taken a similar step in 2008 by withdrawing its ambassador to Japan.

Moscow warned foreign diplomats

On 3 October, the Russian Foreign Ministry reiterated its warning to foreign nationals, including diplomatic mission staff, against remaining in Ukraine.

The ministry recalled its advice to leave Kyiv, citing ongoing strikes against military targets.

The ministry noted that those who failed to heed the warnings would bear responsibility for the potential consequences.

Kremlin spokesman Dmitry Peskov said in a statement on 24 September that they had no information regarding Kyiv handing over two North Korean prisoners of war to Seoul.

Peskov, noting that prisoner matters fall under the authority of the Defence Ministry and intelligence services, said, “Contacts through the special services are continuing.”

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Ex-BND head Hanning tied to former Mossad chief amid spy inquiry

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August Hanning, who led Germany’s Federal Intelligence Service (BND) between 1998 and 2005, was arrested on 6 October on allegations that he obtained roughly 2,000 classified agency documents and used them during contacts with intelligence officers from a foreign state.

Accused of high treason and espionage on behalf of a foreign intelligence agency, the former spy chief is alleged to have procured the documents from former BND employee Manfred D.

Prosecutors stated that the leaked records included internal briefing notes presented to senior German officials, though the Berlin government has not yet publicly disclosed which country received the classified data.

According to an exclusive report by Jake Green for The Cradle, seized email exchanges revealed extensive ties between the arrested Hanning and former Mossad director Danny Yatom.

The correspondence shows that the two former intelligence directors built an ongoing network of contacts following their public service, combining commercial ventures, efforts to secure political influence, and intelligence links.

This dynamic has triggered debate that using personal connections and official access for private gain has left Germany’s intelligence apparatus vulnerable.

Intelligence notes for 10,000 euros and campaign proposals

According to the reviewed emails, Hanning told Yatom in a 2018 message that he could prepare an “overall assessment based on information obtained from senior German officials and intelligence agencies” concerning an unidentified candidate.

The former BND head committed to completing the report by 13 July in exchange for 10,000 euros.

Contacts between the two men subsequently expanded to cover domestic political processes in Germany. Ahead of the September 2021 federal election, Yatom asked Hanning to approach leading candidates.

Describing CIY Global as a “political campaign company”, the former Mossad chief noted that he aimed to introduce its capabilities to German politicians, and he mentioned his intention in the same exchange to transfer documents concerning a cybersecurity firm.

Cybersecurity partnership and surveillance operations across Europe

The partnership between Yatom and Hanning reached beyond political lobbying initiatives into the cybersecurity sector.

Hanning reportedly served as a consultant for World Health Energy Holdings, a cybersecurity company linked to Yatom.

Firms of this type, established or managed by former intelligence personnel, provide commercial platforms on the international market for Israeli-origin surveillance, cyber intelligence, and political influence capabilities.

The operational presence of private Israeli-based surveillance technologies across Europe has recently entered judicial records through scandals in Poland, Spain, and Greece.

Polish prosecutors announced on 12 October that data collected under the previous government via Pegasus spyware against political opponents had been transferred out of the country, adding that manufacturer NSO Group maintained access to the technical infrastructure.

In Spain, the 2022 CatalanGate investigation established that at least 65 people, including politicians, lawyers, and civil society representatives, were targeted using Pegasus or Candiru software, with Citizen Lab researchers publishing strong evidence linking the operation to Spanish authorities.

In Greece, the surveillance operation targeting journalist Thanasis Koukakis and Member of the European Parliament Nikos Androulakis was determined to have used Predator software, linked to Intellexa, a company founded by former Israeli intelligence officer Tal Dilian.

In the German espionage investigation, the traffic between Hanning and Yatom involving paid reporting, contacts with electoral candidates, and commercial partnerships does not yet provide conclusive legal evidence regarding the final destination of the roughly 2,000 classified documents.

Nevertheless, the disclosed correspondence gives German investigators a concrete line of inquiry to assess whether classified state secrets reached commercial networks tied to Israeli intelligence.

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Trump dismisses US envoy to Greece Kimberly Guilfoyle

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US President Donald Trump has dismissed Kimberly Guilfoyle, the US ambassador in Athens, following serious press reports concerning her conduct.

White House Press Secretary Katie Zacharia told reporters during her first briefing that Guilfoyle had been asked to resign.

“She was doing a good job, but we didn’t like what we read in the press,” Trump said. “She was not a member of my family. I think she dated my son a long time ago.”

In a social media post, Guilfoyle stated: “These claims are unfounded, and I will resolutely defend my name, reputation, and integrity.” She added that she was particularly proud of the embassy’s work.

According to Kathimerini, her removal came as no surprise in Washington. Days of successive disclosures and vigorous exploitation of the matter by Democrats had been inflicting political damage on the White House ahead of the sensitive midterm elections.

The US State Department was instructed not to comment, with crisis management transferred entirely to the White House.

Reports indicate that most of the president’s team swiftly favoured Guilfoyle’s dismissal, while Secretary of State Marco Rubio was reportedly uneasy with the demonstratively warm public welcome she had staged for him.

Democrats on the House Foreign Affairs Committee have called for an investigation.

“Her resignation does not absolve her of responsibility,” the lawmakers wrote, adding: “While American families struggled to make ends meet, she used her position as a Trump administration official to enrich herself.”

Chargé d’Affaires Josh Huck will assume ambassadorial duties until a successor is chosen.

Meanwhile, Guilfoyle’s departure is expected to cause delays in agreements between Greece and the US.

These include the so-called “Rubio package”, comprising approximately $4 billion in arms deals finalised only days before the secretary of state’s arrival.

Several procedural steps still remain before the contracts can be signed.

In Athens, opposition parties are demanding answers. Dimitris Mantzos of PASOK called for a detailed briefing on the agreements reached during Rubio’s visit.

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