Shell: Strikes in Australia Could Continue to Drive Up Natural Gas Prices

On Wednesday, executives from Shell stated that despite high inventory levels in North Asia and Europe, indicating that the current natural gas market is well-balanced, natural gas prices could still rise if there are strikes at Australian gas plants.

Recently, concerns over potential strikes by Australian unions, which could disrupt exports from Woodside Energy and Chevron (CVX.N) operated gas plants in Australia, have led to significant increases in natural gas prices in Asia and Europe.

Shell's Director of Gas and Upstream, Zoe Yujnovich, told reporters that although the supply and demand for natural gas are fairly matched, and the risk of strikes in Australia has not changed the trading patterns of the gas market, the strike risk is like a "Sword of Damocles" for the global natural gas supply and prices, which could be impacted at any time.

Currently, Woodside Energy is negotiating with unions to resolve disputes over wages and working conditions to avoid the risk of strikes at Australia's largest gas facility, North West Shelf. The Gorgon and Wheatstone facilities, operated by Woodside Energy and Chevron (CVX.N), supply one-tenth of the world's natural gas.

Yujnovich stated that Shell remains optimistic about the long-term fundamentals of the natural gas market, but uncertainties in China's economy, extreme weather, and labor disputes remain key risks for the market. If there is a significant rebound in China's natural gas demand and Europe experiences extremely cold weather again, the global natural gas market could still face some supply concerns in the near future.