Shell agreed to buy Canadian oil and gas producer ARC Resources for $13.6 billion , the company's biggest deal in more than a decade, as the supermajor doubles down on North American natural gas at a time when global energy markets are being reshaped by Middle East conflict.

The acquisition will expand Shell's Montney shale footprint, boost production growth to 4% annually through 2030, and strengthen its LNG supply capabilities , according to Shell's announcement Monday. The deal adds about 370,000 barrels of oil equivalent per day and is expected to lift Shell's production growth rate to 4% through 2030 . Shell will take on approximately $2.8 billion in net debt and leases resulting in an enterprise value of approximately $16.4 billion , the company said.

The timing is no accident. The acquisition strengthens Shell's supply base for LNG Canada, which began exports in 2025, and could support a Phase 2 expansion doubling capacity by the early 2030s . With Qatar's LNG facilities offline since early March and the Strait of Hormuz effectively closed to most commercial shipping, North American gas has become critical to global supply.

Goldman Warns Oil Could Hit $120 as War Drags On

Goldman Sachs has revised its outlook for global oil prices due to the ongoing conflict in the Middle East, predicting Brent crude could reach $90 per barrel by Q4 2026 , according to analysts at the investment bank. But that's just the base case.

In a more severe case, Goldman Sachs sees prices approaching $120 per barrel, assuming a sustained reduction in oil transport capacity from the Gulf, with an estimated loss of 2.5 million barrels per day . April global oil inventories are drawing at 11-12 million barrels per day, the fastest pace on record since satellite tracking began, with Gulf crude production collapsed to 11.9 mb/d from a pre-war run rate of 26.4 mb/d , the bank noted.

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%. Those prices remain well below Goldman's worst-case scenarios, but inventories could fall to the lowest levels since tracking began in 2018, increasing the risk of sharp, non-linear price spikes , the analysts warned.

The Strait of Hormuz Standoff Continues

The conflict that's driving these market dynamics shows no signs of quick resolution. 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 United States and Israel launched military operations against Iran.

Following the failure of the Islamabad Talks, the US Navy itself began to blockade Iranian ports from 13 April, creating a "dual blockade," with the US Navy blockading Iran and Iran blockading the Gulf , according to reports. Tehran effectively closed the passage through force, with just a small fraction of prewar ship traffic making it through, sending oil prices spiraling , CNBC reported.

The impact on LNG markets has been even more dramatic. The disruption to shipping through the Strait of Hormuz since the start of March has created unprecedented uncertainty, removing close to 20% of global LNG supply from the market and triggering sharp price increases across key importing regions , according to the International Energy Agency's latest quarterly gas market report.

Qatar's LNG Remains Offline, U.S. Exporters Step In

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 , the IEA noted. Qatar's LNG exports represent 20 percent of the global market, and Qatar supplies 20 percent of the world's LNG , Al Jazeera reported.

U.S. exporters have temporarily filled some of the gap. The United States loaded a record 32.15 million metric tons of LNG in the first four months of 2026, up 28% from a year earlier and enough to exceed the 6.93 million ton drop in Qatari shipments over the same period , according to trade data. But U.S. plants have been pushed to very high utilization and tighter loading schedules to cover a hole that is extremely large by LNG standards, but not one they can reliably fill forever , analysts noted.

According to market data, Henry Hub natural gas prices fell 2.4% to $3.25 per MMBtu on Monday, reflecting adequate domestic supply even as U.S. exporters run at maximum capacity.

Looking ahead, 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.

Energy Stocks Surge on Supply Shock

The supply disruptions have been a windfall for energy sector investors. 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 , OilPrice.com reported.

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 , according to the energy news site.

Shell's acquisition of ARC Resources positions the company to capitalize on this environment. Shell CEO Wael Sawan called ARC a 'high-quality, low-cost, and top quartile low carbon intensity producer' that will make Canada a 'heartland' for Shell . Both companies' boards have approved the deal, which is expected to close in the second half of 2026 pending regulatory and shareholder approvals .

The deal underscores a broader shift in energy markets. With Middle East supplies constrained and no clear timeline for normalization, North American producers are becoming increasingly strategic. This shock will start destroying demand for oil and, indeed, it already is, according to Goldman Sachs, with the team expecting global demand for oil to decline by 1.7 million barrels daily over the current quarter .

But until supply and demand rebalance, the normalization of oil exports from the Gulf will take longer than expected, with stabilization now projected for late June, and in extreme scenarios, Brent prices could exceed $120 per barrel if supply disruptions continue , Goldman Sachs warned.