Shell CEO Warns Strait of Hormuz Blockade Risks Major Global Trade Disruption

The escalating conflict between Israel and Iran has raised serious concerns about potential disruptions to global oil supplies, particularly through the strategic Strait of Hormuz, which handles about 20-25% of the world's oil trade. Shell CEO Wael Sawan warned at the Japan Energy Summit that a blockage or interference in navigation signals in the Strait could cause a significant shock to global trade and energy markets, prompting Shell to prepare contingency plans. JP Morgan estimates that a complete closure of the Strait could drive oil prices up to $120-130 per barrel, intensifying the economic impact. The potential involvement of the U.S., with President Donald Trump suggesting possible intervention, further complicates the situation and heightens risks of supply disruptions. Increased costs for shipping through the Strait are already evident, with tanker charter prices more than doubling amid the tensions. Investors are reacting by shifting toward safer assets like gold and the U.S. dollar as market volatility worsens.