NextFin News - The arithmetic of European energy security is failing. Wael Sawan, the chief executive of Shell, issued a stark warning on Wednesday that the continent could be forced into fuel rationing as early as April if the Strait of Hormuz remains effectively shuttered by the escalating conflict between the United States and Iran. Speaking as the war enters its fourth week, Sawan noted that the "buffer" provided by existing stockpiles is evaporating, leaving European diesel and petrol supplies at the mercy of a maritime chokepoint that handles 20% of the world’s oil and a third of its liquefied natural gas.
The crisis reached a fever pitch this week after U.S. President Trump issued a Monday evening ultimatum, threatening to "obliterate" Iranian power plants if oil traffic is not restored. Tehran’s response was a vow to keep the Strait closed indefinitely until any destroyed infrastructure is rebuilt. This geopolitical deadlock has already paralyzed Asian markets, where energy rationing is no longer a threat but a daily reality. For Europe, the timeline is more compressed than many policymakers care to admit. While the International Energy Agency (IEA) has authorized the release of 400 million barrels from emergency reserves, Sawan argues these measures are a temporary salve for a systemic wound. "You cannot replace the flow of 15 million barrels a day with strategic reserves for long," he said, pointing to the logistical impossibility of rerouting such vast volumes around the Cape of Good Hope on short notice.
Market reaction has been swift and unforgiving. Brent crude remains stubbornly north of $100 per barrel, with Goldman Sachs analysts suggesting prices could remain elevated through 2027 if the conflict persists. The impact is already bleeding into the broader economy. In the U.K., inflation has remained steady but high, as the "Hormuz premium" filters through to transport costs and fertilizer production. The risk for Europe is a "double squeeze": the loss of Middle Eastern crude coincides with a period where the continent is still recalibrating its energy mix following the decoupling from Russian gas. If the Strait remains closed, the refined product market—specifically diesel, which powers the European trucking fleet—will be the first to break.
U.S. President Trump has urged allies to "come and help us with the Strait," yet the military reality on the ground suggests a protracted standoff. U.S. and Israeli operations against Iran since February have failed to dislodge the Iranian Revolutionary Guard’s control over the waterway. For European governments, the choice is becoming binary: either secure a diplomatic breakthrough that reopens the Strait or prepare the public for the most significant energy restrictions since the 1970s. The "April deadline" cited by Shell is not a mere projection; it is the point at which the current rate of consumption outstrips the physical arrival of new tankers. Without the 20% of global supply that usually transits Hormuz, the math simply does not work.
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