Shell and Equinor warn that the shock absorbers in the energy market are weakening.
Shell and Equinor executives said that the Middle East disruptions are causing a?lengthening period of tight supply and volatility in the global energy market.
The attacks on oil "tankers" in the Middle East have helped to push crude oil prices up this week, for the first since May. The price of refined products has risen even further, and fuels like diesel have reached record levels.
Adam Ritchie is the chief economist of Shell Trading and he spoke at an industry conference held in Oslo.
Shell calculates that the world has lost "about 36 million metric tonnes of liquefied gas" - equivalent to the combined imports from Britain and France in the past year - as well as "1.6 billion barrels crude oil and condensates", he said.
The impact of the trade war was largely offset by the weaker demand in China, the inventory reductions, the flexible shipping capacity, the spare pipeline capacity, and the rising output from Americas.
Ritchie added that "but those shock absorbers weaken," and that the longer disruptions persist, the more likely it is the markets will be exposed future supply shocks.
He said that reopening the energy chokepoints affected by the crisis would not necessarily lead to an immediate recovery. Bottlenecks in shipping, production, and supply chains may delay a return of normal conditions until well into 2027.
He added, "We'll need to see significant restocking after that, and it's expected to take up supply into the next year or possibly beyond."
Anders Opedal, CEO of Equinor, said that in Europe, where "gas storage levels" are below seasonal averages before winter, "prices will be determined by the weather, LNG flowing through the Strait of Hormuz, and competition between Asia for cargoes."
Opedal, speaking on the fringes of the conference, said that "the shock?absorbers were not as adequate?as at the beginning of this conflict. I think the consumers will notice that over the coming months."
(source: Reuters)
