Shell CEO: Restoring Crude Oil Market Equilibrium May Take a Year or Longer
Shell CEO Wael Sawan Discusses Global Crude Oil Market Challenges
LONDON, June 10 (Reuters) - Restoring a balanced crude oil market amid heavy inventory drawdowns will take a year and possibly longer, Shell CEO Wael Sawan said on Wednesday.
Impact of Geopolitical Events on Oil Production
• Sawan told a conference that over 10% of global crude oil production is out due to the Iran war.
China's Role in Energy Imports and Inventories
• Sawan said Chinese energy imports have come down because China could draw on its inventories.
Inventory Drawdowns and Market Deficits
Short-term Relief vs. Long-term Risks
• The Shell CEO said that while inventory drawdowns were helping the global market right now, they amounted to "borrowing from the future" and there was a deficit of 1.2 billion barrels of crude at the moment.
Timeline for Market Equilibrium
• Sawan said that it would take "close to a year, if not longer" for the market to find its equilibrium again, and until then the stress levels would continue in the system "for quite some time."
Shifts in Fuel Production Priorities
Jet Fuel vs. Diesel Production
• The market has encouraged jet fuel production but at some point diesel pricing will mean diesel production will be prioritised over jet fuel, he said.
Industry Outlook and Future Implications
(Reporting by Shadia NasrallaEditing by Tomasz Janowski)
