Shell’s CEO, Wael Sawan, believes oil and gas prices will keep rising well after the current Middle East conflict ends. This is largely due, he points out, to the expectation that global oil demand will continue to grow. As a result, oil companies will need to continue developing new supplies to offset production declines and depletions in legacy oil fields.
That poses a problem. Sawan told attendees at the Wall Street Journal Leadership Institute CEO Summit that while the oil industry can currently meet global demand, once the Strait fully reopens, it will be more challenging going forward. That’s because “all the easy oil and gas has been found.”
"As a result, oil companies will need to pursue resources that are currently uneconomic to explore and develop. Prices will need to rise to make it profitable to tap into the resources the economy will need in the future. That drives his view that “prices are going to move up, fot the next five to 10 years.”
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