Shell CEO: Oil Prices Are Heading Higher for the Next 5-10 Years—Here's Why It's Not Just About Iran

On June 10, 2026, Shell CEO Wael Sawan delivered a sobering message to the WSJ Leadership Institute CEO Summit: even when the guns fall silent in the Middle East, oil prices aren't coming back down to earth. The upward pressure on crude, he argued, is a five-to-ten-year story, not a short-term geopolitical hiccup .

The core of his thesis? Today's triple-digit price spikes are just an early warning. The deeper, slower-moving crisis is a collision between relentless global demand growth and the finite nature of easily accessible oil reserves .

The Strait of Hormuz: a dramatic accelerant, not the root cause

The numbers from the Strait of Hormuz crisis are staggering. When Iran effectively closed the waterway on February 28, 2026, in response to U.S.-Israeli airstrikes, it cut off a maritime artery that carried roughly 20% of the world's oil supply . The International Energy Agency (IEA) has called it the largest supply disruption in the history of the global oil market .

Gulf producers were forced to shut in an estimated 7.5 million barrels per day (b/d) of production in March, rising to 9.1 million b/d in April . Global oil supply crashed by 10.1 million b/d that month . Brent crude, the international benchmark, rocketed to a peak of $138 per barrel on April 7 .

Sawan's point is that this crisis is a brutal preview, not an anomaly. "Prices are going to move up," he said, describing it as "the story of five to ten years" . The Strait of Hormuz closure simply accelerated a trajectory that supply-and-demand fundamentals had already set in motion .

The demand engine won't stop

While the conflict grabbed headlines, Sawan pointed specifically to sustained global demand as the real long-term driver . The world's appetite for oil isn't fading—it's structurally robust. Even as the EIA's June 2026 Short-Term Energy Outlook noted that high prices and government initiatives are expected to curb global oil demand by about 1 million b/d this year, this is a demand destruction response to extreme prices, not a permanent shift . Sawan's logic is that once prices stabilize—even at elevated levels—underlying demand growth from developing economies and industrial activity will resume.

"All the easy oil and gas has been found"

Perhaps the most striking sentence Sawan uttered was this: "All the easy oil and gas has been found" . It's a blunt acknowledgment of a structural supply problem. The era of giant, low-cost conventional oil fields that gushed with minimal effort is over. New production increasingly comes from complex deepwater projects, unconventionals like shale, or politically unstable regions—all of which carry higher costs and longer lead times. This makes the supply side less elastic and more prone to sustained price pressure.

The depletion cycle is visible in the data. The EIA confirmed that global oil inventories are plummeting—by an average of 8.5 million b/d in some forecast periods . JPMorgan warned in May that stockpiles could hit alarmingly low levels by September if the strait remains closed . These inventory drains leave the market with razor-thin buffers, meaning any future supply shock—geopolitical or otherwise—will translate into price spikes far more quickly than in the past.

Where oil prices stand right now

Despite a ceasefire negotiation process that has cooled the most acute panic, Brent crude remains elevated well above Sawan's stated "ideal" stable range of $60–$70/barrel. By early June 2026, Brent was trading around $94–$97/barrel and WTI near $91/barrel . On June 9, Brent briefly dipped to $92.37 . These levels, more than $30 above the top of the "ideal" band, signal that markets are pricing in persistent tightness, not just a transient conflict premium.

The contango and volatility in the futures curve reinforce this. The EIA forecasts Brent to average $89/bbl in Q4 2026 and $79/bbl in 2027—still above Sawan's $70 upper bound . This means even the official U.S. government forecast expects prices to remain structurally higher than what the CEO of one of the world's largest oil companies calls a stable equilibrium.

Shell's $6.9 billion quarter: profits in a tight market

Shell's first-quarter 2026 earnings underscore the financial reality of this price regime. The company reported adjusted earnings of $6.92 billion—up 24% year-on-year, double the previous quarter, and the highest in two years . The firm explicitly cited gains linked to the Middle East war . Its chemicals and products division, which includes refining and oil trading, booked $1.93 billion in profit, smashing analyst expectations of $1.24 billion .

These numbers matter for Sawan's thesis. When a major integrated oil company can generate nearly $7 billion in quarterly profit during a supply crisis, it has less immediate incentive to flood the market with cheap new supply. High prices sustain high cash flows, which in turn support shareholder distributions—Shell raised its dividend by 5% and returned $5.3 billion to shareholders in Q1 . This financial logic reinforces the structural stickiness of elevated prices: the industry's economic signals don't point toward a rapid supply response.

The demand paradox: will high prices kill demand?

An important counterweight has emerged. The IEA warned in May that global oil demand is now expected to contract by 420,000 b/d year-over-year in 2026—a sharp reversal from pre-war expectations . The EIA's June STEO echoed this, cutting its demand forecast by 1.1 million b/d . High fuel prices, reduced availability, and government conservation measures, particularly in Asia, are destroying demand at the margin .

This creates the central tension in Sawan's long-term forecast. If prices stay high enough for long enough, they will eventually cure the demand growth that Sawan cites as his core driver. The EIA itself projects that reduced demand could limit price increases from the Hormuz disruption . Sawan's view appears to be that this demand destruction is temporary and price-induced, while the structural forces of industrialization and population growth in developing nations will reassert themselves once crude stabilizes—even at a higher baseline.

What it means for the next decade

Sawan's forecast frames a world where cheap oil is historical memory, not a baseline to which markets will revert. The Strait of Hormuz may eventually reopen, but the deeper architecture of the oil market—declining conventional reserves, long investment cycles, and resilient demand growth—suggests prices will remain under structural upward pressure. Shell's own strategy reflects this: the company plans to hold oil production flat while investing in liquefied natural gas and renewables, betting that hydrocarbons will remain the backbone of energy for decades .

For consumers, businesses, and policymakers, the implication is clear. The days of $60 oil as a natural equilibrium may be over. The question isn't whether the current crisis will end, but what price level becomes the new normal once it does.