Energy Markets Face Prolonged Supply Risks as Shell and Equinor Warn of Weaker Shock Absorbers

The assessment comes after attacks on oil tankers and energy infrastructure pushed crude prices towards $110 a barrel earlier this week, while refined fuels such as diesel reached record levels.

Shell chief economist Adam Ritchie said the global energy system had so far demonstrated considerable flexibility in responding to supply disruptions since the conflict began. However, the buffers available to the market are becoming less effective as the disruption continues.

According to Shell estimates, the world has lost approximately 36 million tonnes of liquefied natural gas and 1.6 billion barrels of crude oil and condensates since the conflict began in February.

Some of the impact has been offset by weaker Chinese demand, inventory drawdowns, flexible shipping capacity, spare pipeline capacity and increased production from the Americas.

Those measures, however, cannot necessarily be sustained indefinitely.

Ritchie warned that the longer disruptions continue, the greater the risk that future supply shocks will have a stronger effect on prices. Even reopening disrupted energy chokepoints would not necessarily produce an immediate return to normal conditions because shipping, production and supply-chain bottlenecks could remain.

The implications are particularly important for Europe, where gas storage levels are below seasonal averages ahead of winter.

Equinor Chief Executive Anders Opedal said European energy prices would depend on several variables, including weather conditions, LNG flows through the Strait of Hormuz and competition from Asian buyers for available cargoes.

The energy companies' warnings highlight the difference between restoring physical supply routes and restoring market stability. Infrastructure may reopen, but rebuilding inventories and repairing damaged logistics networks can take considerably longer.

Higher energy prices also create wider economic risks. Manufacturers, transport companies and utilities may face increased operating costs, while households could experience higher heating and transport bills.

For policymakers, the developments reinforce the importance of energy diversification, storage capacity and infrastructure resilience.

Investors are also monitoring the ability of producers and transport networks to respond to further disruptions.

With global inventories under pressure and supply routes remaining vulnerable, the energy market could remain exposed to volatility well into 2027 even if major chokepoints gradually reopen.