Shell PLC (LSE:SHEL, NYSE:SHEL) said there could be short-term wholesale gas price rises if Australian terminal workers opt to go on strike.
Workers at major Chevron Corporation (NYSE:CVX) and Woodside Energy Group Ltd (ASX:WDS, LSE:WDS, OTC:WOPEF)-operated liquified natural gas sites have threatened strikes in recent weeks in a bid to secure better pay and conditions.
Given the sites involved account for some 10% of global supply, wholesale prices have already faced some volatility, with talks between unions and the firms ongoing.
Zoe Yujnovich, director at oil major Shell, warned that any action could indeed lead to further changes in global gas prices, which soared last year on the back of the Ukraine war.
“Supply and demand balance in liquified natural gas is quite matched which is why we see some vulnerability,” she said.
Given there has not been a significant jump in hedging or buying habits as of yet, Yujnovich suggested news of the strike threats had prompted an “over-reaction globally in terms of price response” so far.
Wholesale natural gas effectively determines the price of other sources of energy, meaning sustained highs can translate to higher household bills – as seen over the past year.
So far this month, wholesale gas has increased by 24% on the news of the prospective strikes, climbing from 76p to 94p per British thermal unit, as per Trading Economics data.