Mideast Oil Flows Are Near 80% of Prewar Levels, Shell CEO Says

Oil flows from the Middle East are at about 80% of pre-conflict volumes, the chief executive officer of Shell Plc said, offering one of the most authoritative assessments yet of how the region’s exports are rebounding.

“Despite everything happening, we’re now close to 80-plus percent of prewar levels, showing the resilience of many of these nations to continue to honor their commitments to supply the world,” Wael Sawan said at the Energy Intelligence Forum in London on Tuesday.

While several big banks and shipping analytics firms have also suggested flows are approaching pre-conflict levels, there continues to be a debate around the precise figures. The actual number of vessels going in and out of the Strait of Hormuz, and parts of the Red Sea, is obscured by the fact that ships are frequently switching off their satellite signals, making it harder to count cargoes.

That leaves analysts and traders reliant on satellite imagery and on-the-ground information for a sense of exactly how much is moving.

Sawan said the Iran war is also bringing energy security back into focus. Group of Seven nations last week announced a plan to release as much as 100 million barrels of oil from emergency reserves, underscoring the need for such buffers in the event of severe supply disruptions. At the same time, Middle Eastern producers are studying new pipelines to add more exit routes for their oil.

Read More: G7 to Release Up to 100 Million Barrels of Diesel, Crude

“There’s a recognition once again that you cannot have national security without energy security,” Sawan said. “You cannot have an industrial or an economic strategy that is not underpinned with a solid energy strategy.”

He also cautioned that the longer the war continues, the harder it will be for markets to continue managing the disruption. While flows through Hormuz have risen, they’re not yet back to normal, and the crunch would have been worse were it not for a drop in Chinese demand and production ramp-ups elsewhere.

“We have maybe softened the worst impacts of the crisis, but there is only so long that you can continue to do that without further discontinuities emerging,” he said.