Shell CEO: Global Oil Market Short Nearly 1 Billion Barrels

Iran War Triggers Historic Oil Shortage

Shell CEO Wael Sawan warned on May 11, 2026, during the company’s first-quarter earnings call that the global oil market is short almost 1 billion barrels of crude due to months of disruption triggered by the Iran war. According to Sawan, the oil had either been stranded in tankers or had never been produced. “The hard facts are we have dug ourselves a hole of close to a billion barrels of crude shortage at the moment, either because of locked-in barrels or unproduced barrels,” Sawan said. “Of course, that hole is deepening every single day, so the journey back will be a long one.”

Strait of Hormuz Supply Disruption

The International Energy Agency (IEA) has described the conflict as the biggest supply disruption in history. Traffic through the Strait of Hormuz has been brought to an effective standstill. Before the war broke out on February 28, about a fifth of global oil supplies, or 20 million barrels, passed through the waterway each day.

Global Inventory and Strategic Reserve Response

The world had an estimated 8.2 billion barrels of emergency and commercial oil inventories before the conflict intensified, according to the IEA. Countries coordinated the release of 400 million barrels from strategic reserves in March to prop up the market.

Shell’s Financial Performance and Operational Impacts

In the first quarter of 2026, Shell reported a 24 percent year-on-year rise in profits to $6.9 billion. The company increased its dividend by 5 percent. Higher oil prices have boosted its earnings. Brent crude has surged since the start of the war to as high as $126 a barrel. Before the conflict it was trading at about $70 a barrel.

Shell said damage to a unit at its giant Pearl gas-to-liquids project in Qatar would cost “well below half a billion dollars” to repair. It could be about a year before the facility returns to service. The facility was targeted during Iranian strikes on Qatari energy infrastructure in March.

Competitor Oil Majors Report Similar Warnings

Rival BP reported underlying profits of $3.2 billion for the first quarter of 2026, which was more than double the level recorded a year earlier. The company said profits reflected “exceptional oil trading” conditions during the conflict. BP chief executive Meg O’Neill said it would take “a period of months” after the war ends for activity to normalise and warned there were still major questions over how governments would rebuild depleted strategic stocks.

Chevron chief executive Mike Wirth told Reuters it could take months for exports through Hormuz to recover once the conflict ends.