Shell Warns Iran War Shock Absorbers Are Wearing Thin
Shell's chief economist said on September 16 that the buffers absorbing US-Iran war disruption may be close to exhausted, raising Europe's winter supply risk.
Shell chief economist Adam Ritchie said on Wednesday (2026-09-16) that oil and gas markets had been "remarkably resilient" to supply disruptions caused by the US-Iran war, but warned that the "shock absorbers" may now be "wearing thin." Ritchie did not specify which particular buffer or market he judged most exposed, leaving the remark as a broad signal rather than a precise forecast — and all the more notable for that.7
The warning comes five months into managed attrition. Oil flows resumed through the Strait of Hormuz after the US lifted its naval blockade and Washington and Tehran signed a 14-point memorandum, yet insurers remained wary of extending commercial coverage on those routes even as political guarantees held, oilprice.com reported on June 19 (2026-06-19). Tankers moved. Commercial confidence did not follow at the same pace.5
Shell itself turned the disruption into profit. The company expected significantly higher oil and LNG trading results in the second quarter of 2026 as Iran war volatility swept through energy commodity markets, oilprice.com reported on July 7 (2026-07-07). A company that gained from the volatility is also one that has watched the underlying system absorb the costs.6
UBS analysts made a similar point from the inventory side, warning that oil buffers "have now largely been exhausted" with stockpiles approaching record lows, according to a May (2026-05-19) market review.3
ICE Brent crude front-month was at $103.37 a barrel as of September 20 (2026-09-20), with Dubai crude at $115.46 a barrel on that date. The more than $12-a-barrel Dubai premium over Brent reflects how tightly Middle Eastern supply grades are being priced relative to Atlantic benchmarks, a gap that stretches when Persian Gulf transit is uncertain.
ICE Endex TTF front-month gas was at €79.54 per megawatt-hour as of September 20 (2026-09-20), with THE M+1 at €80.70 per megawatt-hour on that date. Both levels are well above pre-war norms and sustain coal-to-gas switching in European power markets. But analysts told Montel in May (2026-05-21) that LNG disruptions driven by the Iran war were unlikely to restart meaningful EU coal burning; the phase-out, they argued, had too much institutional momentum to reverse on a supply security shock alone.1
European storage provided the main reason for relative market calm. The European Commission said on Thursday (2026-05-28) that EU gas stocks could reach 80% of capacity by winter despite the ongoing conflict, though it stipulated the refilling pace needed to be "regularly assessed." Eighty percent is sufficient to enter a heating season. It is not sufficient to absorb a new round of supply disruption if temperatures undershoot or the Hormuz memorandum fractures.4
Spanish energy executives read the situation as less comfortable. Leaders including Moeve's chief executive told an industry event on Tuesday (2026-05-19) that the crisis had exposed a "real risk" of further energy price escalation and underscored Europe's reliance on supply routes outside its control.2
Markets have been willing to distinguish between the political settlement and the physical supply risk: Brent's $103 handle and TTF above €79/MWh suggest some war premium persists, but not the extreme spikes of earlier months. Ritchie's remarks on Wednesday (2026-09-16) do not change that pricing, but they come from a company positioned at the centre of LNG and oil flows in question. The 14-point US-Iran memorandum provides a framework for Hormuz access. Whether commercial shipping confidence fully recovers, and at what pace, is what determines how much buffer actually remains when northern hemisphere winter gas demand peaks.7,5,4