Can Shell Safeguard Its Shipping Through Middle East Tensions?

Shell CEO Wael Sawan announced on June 19, 2025, that the company is exercising extreme caution with its shipping operations in the Middle East due to the escalating Israel-Iran conflict, now in its seventh day. The Strait of Hormuz, through which 20% of global oil flows, is a critical chokepoint where electronic interference is disrupting commercial ship navigation systems.

Web reports confirm a collision between two oil tankers, the Adalynn and Front Eagle, on June 17, 2025, 15 nautical miles off the UAE’s Gulf of Oman coast, though it was deemed “not security-related.” Shell’s proactive measures include heightened security protocols and contingency plans to mitigate risks in this volatile region.

Will Electronic Jamming Compromise Maritime Safety?

The Joint Maritime Information Center (JMIC) reported increased electronic interference near Iran’s Port of Bandar Abbas, affecting automated identification systems (AIS) and positional reporting in the Strait of Hormuz. The UK Maritime Trade Operations (UKMTO) noted this jamming on June 16, 2025, which poses a significant threat to safe navigation.

Shell’s operations, reliant on precise navigation for its fleet, face heightened risks of collisions or misrouting. Web sources indicate that Shell is likely enhancing onboard cybersecurity and backup navigation systems to counter these disruptions, though the company has not publicly detailed its technical responses.

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Can Shell Avoid Economic Fallout from a Blockade?

Iran’s threats to close the Strait of Hormuz raise fears of a supply shock, as reported by Iranian lawmaker Esmail Kosari on June 17, 2025. The strait handles 20.9 million barrels of oil daily, and a closure could push Brent crude prices above $100 per barrel, per Goldman Sachs estimates. Shell, a major player in global LNG and oil markets, would face soaring freight rates and war-risk insurance premiums, which doubled for some carriers post-conflict escalation.

Web data shows Shell’s prior suspension of Red Sea shipments in January 2024 due to Houthi attacks, suggesting a precedent for rerouting to avoid high-risk zones, potentially via longer routes around Africa.

Heightened Risks Strain Global Supply Chains

The Israel-Iran conflict has prompted a modest drop in vessel traffic through the Strait of Hormuz, with JMIC data showing a decline from 147 cargo-carrying vessels on June 9 to 111 on June 15, 2025. Shell’s cautious approach aligns with industry trends, as BIMCO’s Jakob Larsen noted shipowners avoiding the strait due to escalating risks.

This reduction strains transshipment hubs like Dubai’s Jebel Ali Port, critical for Shell’s regional logistics. Web analyses warn of potential Asian port congestion if rerouting intensifies, which could delay Shell’s deliveries and increase operational costs.

Did you know?
In 1988, during the Iran-Iraq War’s Tanker War, over 400 ships were attacked in the Persian Gulf, yet the Strait of Hormuz remained open due to U.S. naval escorts under Operation Earnest Will, protecting global oil flows.

U.S. Involvement Looms Over Operations

President Donald Trump’s ambiguous stance on U.S. military involvement in the Israel-Iran conflict adds uncertainty to Shell’s planning. Web reports indicate Iran has threatened to target U.S. and allied ships if they defend Israel, potentially escalating risks in the strait.

Shell’s contingency plans, as mentioned by Sawan, likely include scenarios for U.S. naval intervention, which could secure the waterway but also heighten regional tensions. The U.S. Fifth Fleet’s presence in Bahrain offers some reassurance, but a full-scale conflict could disrupt Shell’s operations indefinitely, as BIMCO’s Larsen warned.

What Lies Ahead for Shell’s Middle East Operations?

Shell’s cautious navigation of the Strait of Hormuz amid the Israel-Iran conflict reflects the precarious balance between safety and supply chain continuity. Electronic jamming, potential blockades, and U.S. involvement pose unprecedented challenges, while rising freight and insurance costs threaten profitability. As the company bolsters security and explores rerouting, its ability to adapt will determine its resilience. Can Shell maintain its critical role in global energy markets amidst this escalating crisis?