Shell agreed to buy Canadian oil and gas producer ARC Resources for $13.6 billion, its biggest deal in more than a decade as it seeks to sustain output in the long term , the company announced Sunday. Shell said it will take on $2.8 billion of net debt and leases resulting in an enterprise value of $16.4 billion , marking a dramatic reversal for an oil major that exited Canada's oil sands less than a decade ago amid pressure to clean up its portfolio.

Nearly a decade after selling its dirtier Canadian oil sands assets amid the global transition to clean energy, Big Oil giant Shell is reversing course in Canada , according to Fortune. The deal targets the Montney shale basin in British Columbia and Alberta, where the deal adds about 370,000 barrels of oil equivalent per day of production and 2 billion barrels of reserves to Shell's portfolio . The transaction is expected to bring annualised synergies of around $250 million within a year of closing , Shell said in a statement.

Oil Prices Surge as Iran Diplomacy Collapses

While Shell was announcing its Canadian expansion, oil markets were reeling from the collapse of U.S.-Iran peace negotiations. Oil prices rose Sunday after an Iranian official warned that the Strait of Hormuz will "under no circumstances" return to its previous state. Brent crude, the international benchmark, was up about 2.14% to $107.58. US crude was up 2.08% to $96.36 , CNN reported.

President Donald Trump on Saturday canceled plans to send U.S. envoy Steve Witkoff and Jared Kushner to Islamabad, Pakistan, for negotiations with Iran , according to CNBC. Peace talks have stalled ahead of the war's two-month mark, prolonging oil disruptions and stoking higher gas prices around the world . The disruption has created what the International Energy Agency has characterised as the "largest supply disruption in the history of the global oil market" .

According to market data, WTI Crude traded at $71.50 per barrel on Friday, up 0.6%, while Brent Crude stood at $75.20 per barrel, up 0.5%. However, these figures reflect Friday's close before the weekend's diplomatic breakdown sent prices surging back above $100 on Monday morning.

Goldman Warns Oil Could Hit $120

Brent is set to average $90 a barrel in the fourth quarter, up from a previous outlook for $80, analysts including Daan Struyven and Yulia Zhestkova Grigsby said in an April 27 note , Bloomberg reported. Goldman Sachs raised its Q4 2026 Brent forecast to $90/bbl and WTI to $83/bbl, citing 14.5 mln bpd of Middle East output losses driving a record 11-12 mln bpd global inventory draw in April .

The bank's upside scenario is even more alarming. In a severe case where the ceasefire fails and persistent Middle East production losses reach around 2 million barrels per day, Brent could average $115 per barrel in the fourth quarter. If the Strait of Hormuz remains mostly shut for another month, Goldman flagged Brent could average $120 in Q3 and $115 in Q4 , according to OilPrice.com.

The team expects global demand for oil to decline by 1.7 million barrels daily over the current quarter and by some 100,000 barrels daily over 2026 compared to 2025. "Because extreme inventory draws are not sustainable, even sharper demand losses could be required if the supply shock persists longer," the Goldman team wrote .

China's Clean Tech Exports Surge on Energy Crisis

The oil shock is accelerating an unexpected shift in global energy markets. Chinese exports of clean technology, including solar panels, electric vehicles, and batteries, surged to a record-high in March as the war in the Middle East resulted in a major oil and gas supply shock that drove consumers and governments to lean more on renewable energy and EVs. The export value of all of China's clean tech exports surged to $25.77 billion last month, data by energy think tank Ember showed .

This was 30% higher than the value of the February exports, and more than 50% higher than the Chinese sales of clean tech overseas in March 2025 , OilPrice.com reported. A Thursday report from Ember said China exported 68 gigawatts of solar technology in March, surpassing the previous record set in August by 50% , according to CNN.

Exports of China's "new three" products rose sharply in March: electric vehicles climbed by 53% compared to the same month last year, while lithium batteries were up 34% and solar cells jumped 80%, according to customs data reported on by Bloomberg . Fifty countries set new records for Chinese solar imports, with the most significant growth coming from emerging markets in Asia and Africa hit hardest by the energy crisis , CNN reported.

LNG Carrier Orders Accelerate

The supply disruptions are also driving demand for liquefied natural gas infrastructure. A record high number of 90-100 liquefied natural gas carriers (LNGC) are set to be delivered in 2026, according to estimates by analysts at Poten & Partners and Drewry, Reuters reports . After a slow newbuild rate in 2025, orders are picking up this year, and South Korean and Chinese shipyards contracted 35 new LNG carrier builds in the first quarter alone, compared to 37 LNGCs contracted in all of last year , OilPrice.com reported.

The new U.S. LNG export projects that are scheduled to come on stream in the coming years would generate demand for new LNG carriers, according to Jotaro Tamura, the chief executive of Japan's Mitsui O.S.K. Lines, the biggest owner of LNG vessels in the world .

The energy markets are being pulled in opposite directions—traditional oil and gas companies like Shell are making billion-dollar bets on hydrocarbon production even as the supply shock accelerates the transition to alternatives. With peace talks stalled and Goldman warning of triple-digit oil prices through the summer, the only certainty is more volatility ahead.