The Chicago actor watched the ceremony on Sunday from a bar stool at the Old Town Ale House.
Bar owner Bruce Elliot tweeted a photo of Shannon sitting at the bar in a black puffy jacket with a half-filled drink glass. The Chicago actor was watching a small screen perched on the wall.
The TV had no sound, just subtitles, according to Elliott's tweet. He added that the "juke box was rocking, and the beer flowing."
The Old Town Ale House is one of Shannon's favorite hangouts, according to the Chicago Sun-Times. Shannon got his start acting in Chicago and co-founded A Red Orchid Theatre, which is located around the corner for the Old Town Ale House.
"Shape of Water," which was nominated for 13 Oscars, won Best Picture.
In the movie, Shannon plays Richard Strickland, the villain who captures and tortures an amphibian man.
Michael Shannon watching the film he starred in, "Shape of Water", win best picture while sitting in the Old Town Ale House. No sound on the TV, just sub-titles. Of course the juke box was rocking, and the beer flowing. Where else would you want to spend Oscar night? pic.twitter.com/WAC6uc6guZ— Bruce Elliott (@GeriatricGenius) March 6, 2018