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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

Vance leads indirect push for US-Iran ceasefire and nuclear talks

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US Vice-President JD Vance has been personally involved over the past two weeks in indirect talks with Iran aimed at securing a fresh ceasefire and restarting nuclear negotiations.

According to Axios, Vance’s intense engagement indicates that he has taken it upon himself to extract the US from the conflict, which he views as responsible for the Republican Party’s shocking losses in this week’s elections.

This elevates the latest round of indirect talks to the highest echelons of the administration.

US officials and regional sources state that Trump is currently willing to let diplomatic efforts run their course to see whether any agreement is achievable.

Asked by reporters on Friday what his message was to Iran, Trump said, “We are talking to them.”

According to sources with direct knowledge of the matter, Vance speaks almost daily with Qatari Prime Minister Sheikh Mohammed bin Abdulrahman Al Thani, Pakistan’s Chief of Army Staff Field Marshal Asim Munir, and other mediators regarding the negotiations with Iran.

White House envoy Steve Witkoff and Jared Kushner, President Trump’s adviser and son-in-law, are also involved in the process.

Sources say Vance and the Qatari and Pakistani mediators have been discussing the possibility of holding a working-level technical meeting between the US and Iran in the coming days, though this has not yet materialized.

Before the war began in late February, Vance was among the most sceptical voices in Trump’s inner circle on the issue, advocating instead for a diplomatic solution.

In April, he led the US negotiating delegation at the Iran summit held in Islamabad and was personally involved in the talks that yielded a memorandum of understanding (MOU) signed between the US and Iran in June.

Vance subsequently headed the US delegation during a series of direct talks with Iran in Switzerland.

Two weeks ago, Vance sent a letter to Mohsen Rezaei, Secretary of Iran’s Supreme National Security Council, proposing that direct negotiations resume.

Rezaei is one of the closest advisers to Iran’s Supreme Leader, Mojtaba Khamenei.

Iranian officials noted that Vance’s letter generated positive momentum toward restarting talks.

On Wednesday, Vance said the war was the primary reason for the Republicans’ repudiation at the polls.

Sources involved in mediation efforts report that while progress is being made, the process is moving very slowly.

On Friday evening, the prime minister of Qatar said, “Over the past few weeks, we worked with our colleagues in the US administration who have a sincere intention to contain the situation and de-escalate. Thanks to them and the voices of reason in Tehran, we prevented the situation from spinning out of control.”

The prime minister added that discussions with the Trump administration continued following the midterm elections, though they were not as active as in previous days “because there are other matters.”

Nevertheless, he noted that the US intention to find a diplomatic resolution “remains ongoing” and emphasized that an agreement is possible.

On Friday morning, Trump and the Emir of Qatar discussed Qatari efforts to bridge differences between the US and Iran as part of an accord.

According to a statement from his office, Sheikh Tamim emphasized the necessity of “pursuing dialogue and diplomatic channels to resolve differences, prevent the region from facing further escalation, and ensure freedom of maritime navigation as well as the security of energy supplies.”

Separately, Trump confirmed on Friday that the US military conducted a strike on an anti-aircraft missile launcher on Qeshm Island in the Strait of Hormuz after it fired a missile at a US fighter jet.

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Diplomacy

Ukraine faces demographic collapse as fertility rates slide

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British magazine The Economist reported that mobilization, conflict casualties, and pervasive uncertainty have left Ukraine confronting the threat of demographic collapse.

According to data cited by the magazine, Ukraine’s fertility rate has declined from 1.2 children per woman in 2020 to between 0.8 and 0.9.

This rate marks a lower level than that of any major nation except South Korea.

In the first half of 2026, the number of deaths in Ukraine surpassed the number of newborn babies threefold.

The report noted that ever since independence was gained in 1991, the number of births in the country has lagged behind the number of deaths every year.

The Economist emphasized that the demographic collapse driven by the ongoing fighting constitutes an “existential threat.”

The magazine identified mass refugee migration as the principal driver of the population loss.

More than 5 million Ukrainians reside abroad, predominantly in Europe.

The proportion of those wishing to return among those who left the country is also steadily shrinking.

According to data from the Centre for Economic Strategy (CES), the share of those seeking to return dropped from 74% in 2022 to 43%.

The fact that the majority of refugees consist of Ukrainian children and women under the age of 44 further aggravates the demographic picture.

The Kyiv government decided to exempt men under the age of 25 from mobilization to alleviate the demographic decline.

The magazine reported, however, that many young people have fled the country, while those who remain do not plan to start families.

Projections cited in the report indicate that even if hostilities cease in the coming years, Ukraine can, at best, expect merely a deceleration of depopulation.

Olga Duhnich, an expert at the Ukraine-based think tank Frontier Institute, stated that the generation born in the 1990s and 2000s is the least populous in Ukraine’s modern history, meaning the country cannot expect a post-conflict baby boom.

The United Nations (UN) projects that Ukraine’s population will decline by 0.7% to 0.9% each year over the next two decades.

Under this projection, Ukraine’s population will fall to approximately 25 million by 2040.

If hostilities drag on, people are expected to abandon plans to have children, deepening the crisis even further.

Beyond exempting men under 25 from mobilization, the Kyiv government is rolling out various support packages to boost birth rates.

Under legislation enacted in the country, parents who have children receive a direct payment of 50,000 hryvnias (around $1,100).

Parents are also paid 7,000 hryvnias each month during the first year.

Other state programmes subsidize childcare costs, while Ukrainian soldiers are granted free freezing of egg and sperm cells.

Ukrainian Minister of Social Policy Denis Ulyutin said in May to the Livyi Bereh media outlet that roughly 22 to 25 million people lived in government-controlled territories.

Ulyutin characterized the prevailing picture by saying: “This is a catastrophe.”

Ella Libanova, Director of the Institute for Demography and Quality of Life Research, estimated the population at 29 million during the same period.

Libanova attributed the steep fall from a population of 30 million in 2025 to high death rates and the demographic crisis.

In a statement in October, Libanova announced that Ukraine’s population had slipped to 28.5 million.

Institute Director Libanova said: “The population is already at 28.5 million; we lost half a million people. We lost them, but thankfully this was still caused by migration rather than casualties.”

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Armenian opposition urged to form joint front against constitution

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Narek Karapetyan, a lawmaker and head of the Strong Armenia faction in the Armenian parliament, has urged opposition parties to unite around four core principles set out in a joint declaration.

The key points of the declaration include resisting territorial concessions and blocking the adoption of a new constitution, which the opposition has termed the “Aliyev constitution”.

According to a report by Aysor.am, Narek Karapetyan stated that the opposition meeting was originally planned to be led by his uncle, businessman and Strong Armenia movement leader Samvel Karapetyan.

“We initiated the meeting, but the authorities took preemptive steps to prevent Samvel Karapetyan from launching the national unification process,” Narek Karapetyan said.

Noting that, despite these events, opposition representatives convened and signed a joint declaration based on four agreed articles, Narek Karapetyan invited other opposition forces and members of the public to join the alliance.

“We will not allow them to implement the Aliyev constitution in Armenia. We must unite,” Karapetyan said.

Ahead of these developments, Armenian National Security Service personnel detained Strong Armenia Party leader Samvel Karapetyan following a search of his home.

The party’s press secretary, Agavni Sukiasyan, announced that on the morning of the same day, the Investigative Committee of Armenia searched the homes of both Samvel Karapetyan and Narek Karapetyan.

In a report citing the Investigative Committee, Armenpress stated that Samvel Karapetyan was detained as part of a case involving allegations of causing large-scale financial damage to the Electric Networks of Armenia (ENA) company, embezzling entrusted property, and money laundering.

According to committee figures, the total damage inflicted on the company exceeds $179 million.

Narek Karapetyan’s home was also searched at the end of July as part of a criminal case.

On 22 July, Armenia’s Central Electoral Commission approved the Prosecutor General’s request to strip Narek Karapetyan of his parliamentary immunity, and Karapetyan was charged with large-scale money laundering.

According to information reported by Sputnik Armenia, the investigation is linked to charges brought against Strong Armenia supporter Aleksan Aleksanyan.

Investigative authorities allege that Aleksanyan received approximately $4.4 million and €230,000 from the Karapetyan-owned Tashir Foundation under the guise of gifts and loans.

Several criminal cases had previously been opened against Samvel Karapetyan.

In 2025, Karapetyan was charged with publicly calling for the violent seizure of power after backing the Armenian Apostolic Church, which had been criticized by Armenian Prime Minister Nikol Pashinyan.

In January, legal proceedings were also launched against Karapetyan on charges of large-scale tax evasion and money laundering.

Separately, in early July 2025, the Armenian parliament approved a bill enabling the nationalization of the Electric Networks of Armenia company.

In March, Armenia’s Constitutional Court ruled that the nationalization process in question complied with the law.

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