Shell announced Monday it has agreed to acquire Canadian energy company ARC Resources in a deal valued at $16.4 billion , marking the oil supermajor's biggest acquisition push in years as companies race to lock down production capacity amid a global energy crisis.

The transaction will add roughly 370,000 barrels of oil equivalent per day to Shell's portfolio and is designed to increase the London-listed firm's long-term oil and gas production , according to CNBC. ARC's production lies near Shell's existing Canadian fields which feed into the LNG Canada plant, in which Shell holds a 40% share and whose liquefied natural gas can reach Asian buyers faster than most other North American LNG , Reuters reported.

The deal will give Shell 2 billion barrels of reserves and would generate double-digit returns and boost free cash flow per share from 2027 without affecting its investment budget of $20 billion to $22 billion through to 2028 , the company said. The deal allows Shell to raise its compound annual production growth target for the decade from 1% to 4% compared to 2025 , addressing concerns about the company's aging fields.

Oil Prices Could Hit $120 as Hormuz Standoff Continues

The Shell deal comes as Goldman Sachs raised its oil price forecasts, with Brent set to average $90 a barrel in the fourth quarter, up from a previous outlook for $80 , Bloomberg reported on April 27. But the investment bank's warnings go much further in adverse scenarios.

Under a scenario where the Strait of Hormuz doesn't normalize until the end of July, Brent would likely reach more than $120 a barrel within the next two months, and in a severely adverse case where oil flows recover only about 70% of pre-war capacity, Brent would hit more than $140 a barrel over the next few months before tapering off to around $120 by year-end , according to analysis published by The Motley Fool.

April global oil inventories are drawing at 11-12 million barrels per day, the fastest pace on record since satellite tracking began, while Gulf crude production has collapsed to 11.9 mb/d from a pre-war run rate of 26.4 mb/d — a 14.5 mb/d hit , Benzinga reported, citing the Goldman analysis.

According to market data, WTI crude traded at $71.50 per barrel on Monday, up 0.6%, while Brent crude stood at $75.20 per barrel, up 0.5%.

Dual Blockade Keeps Hormuz Traffic Sparse

Following the failure of the Islamabad Talks, the US Navy itself began to blockade Iranian ports from 13 April, creating a situation described as a "dual blockade", with the US Navy blockading Iran and Iran blockading the Gulf , according to Wikipedia's documentation of the crisis.

Tehran effectively closed the passage through force, with just a small fraction of prewar ship traffic making it through, and the de facto closure has sent oil prices spiraling, leading to higher prices for gasoline and other products in the U.S. , CNBC reported on April 27.

Reuters reported that shipping traffic through the Strait of Hormuz, a major maritime choke point for world energy trade, has been largely blocked by Iran since 28 February 2026 , when the conflict began.

Qatar LNG Disruption Boosts U.S. Exporters

The Hormuz crisis has devastated Qatar's LNG exports, creating opportunities for American producers. The Ras Laffan facility in Qatar, which is the largest liquefaction facility in the world, has been offline since it was first attacked on 2 March , according to the International Energy Agency.

The combined effect of short-term supply losses and slower capacity growth could result in a cumulative loss of around 120 billion cubic metres of LNG supply between 2026 and 2030 , the IEA warned in its latest quarterly gas market report.

Record-high U.S. LNG exports have managed to mitigate so far the shock supply loss from Qatar, but American exporters are unlikely to continue running facilities at full capacity for all of this year as maintenance and hurricane season are likely to curtail some supply in the coming months, as Qatar's LNG is offline, and so are the UAE exports, due to the closure of the Strait of Hormuz , OilPrice.com reported.

Energy Sector Dominates Market Performance

The turmoil has propelled energy stocks to the top of market performance charts. The Energy Sector has netted a 26.6% return in the year-to-date compared to 4.7% rise by the S&P 500, the best sector performance and nearly double the 14.1% gain by second-placed Materials Sector , according to OilPrice.com.

Oil prices were rallying again on Monday, with Brent crude for June delivery up 2.92% to trade at $108.30 per barrel at 3:05 pm ET while the corresponding WTI crude contract gained 2.26% to change hands at $96.53/bbl , the publication reported.

Natural Gas Intel reported that Oil & Gas stocks are on track to outperform the broader market by its widest margin on record, driven by Middle East conflict, rising demand from the AI boom, and a continued rotation away from expensive technology and growth stocks .

The energy market's dramatic reversal reflects a fundamental shift as geopolitical risk, supply constraints, and surging power demand from AI data centers converge to reshape the sector's role in the global economy.