Europe to face fuel shortage – Shell CEO

The Iran war is set to hit diesel and gasoline supplies starting next month, Wael Sawan has warned

European countries could face fuel shortages as soon as next month as a result of the US-Israeli war on Iran, Shell CEO Wael Sawan has warned.

Major energy facilities in the Gulf have been damaged in the conflict, while maritime traffic through the Strait of Hormuz, a key waterway that handles about 20% of global oil flows, has nearly halted.

The war has already affected supplies of jet fuel, Sawan said on Tuesday, as cited by Reuters. Diesel is set to be next, followed by gasoline at the start of the summer driving season, he added.

“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 at an energy conference in Houston.

Sri Lanka, Bangladesh, and Pakistan have reduced working hours and introduced fuel rationing. Japan and South Korea have released oil from strategic reserves.

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Europe is less reliant on Gulf supplies than Asia. It imports about a quarter of its crude, in addition to certain petroleum products, from North Africa. Alternative sources include the US, Norway, and West Africa. However, supply remains tight and fierce competition from Asian buyers for cargoes is driving prices higher.

The crisis has revived discussions in the EU about returning to Russian supply. Before 2022, Russia accounted for roughly a quarter of the bloc’s oil imports. Since then, the EU has sharply reduced the imports and is planning a full phase-out of all Russian oil by 2027.

The only major remaining route, the Druzhba pipeline via Ukraine, has been disrupted since late January. Hungary and Slovakia have accused Kiev of halting flows for political reasons.

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The situation has led to some politicians calling for a reassessment of energy sanctions on Moscow to ease supply pressures and curb rising costs. The European Commission, however, has ruled out any return to Russian energy. Commission President Ursula von der Leyen warned earlier this month that doing so would be a “strategic blunder.”