A Market No Longer Expecting a Quick Recovery
Global energy markets are shifting from shock to acceptance of a prolonged disruption, as analysts warn that the current crisis in the Persian Gulf is unlikely to resolve quickly.
According to ING’s latest analysis, the market is increasingly pricing in a longer-lasting interruption to oil and gas flows, particularly through the Strait of Hormuz—a route that typically carries a significant share of global energy supply.
The key shift is psychological as much as physical. What initially looked like a short-term supply shock is now being treated as a structural disruption with lasting consequences.
Supply Losses Are Already Significant
The scale of disruption is substantial:
- Around 8 million barrels per day (b/d) of crude oil production has already been shut in
- A much larger volume of supply remains at risk if the situation escalates further
Even if shipping routes reopen, the recovery will not be immediate. Producers that have shut down operations will need time to restart, meaning supply constraints could linger well beyond the end of the conflict.
This creates a delayed rebound effect—markets may remain tight even after geopolitical tensions ease.
Why This Disruption Is Different
ING highlights three structural constraints that make this crisis particularly difficult to resolve:
1. Limited Spare Capacity
Much of the world’s spare oil production capacity is located in the same region affected by the disruption. That limits the ability of producers to compensate for lost supply.
2. Slow Supply Response
Alternative sources, such as US shale production, cannot ramp up quickly enough. New supply could take 6–12 months to reach the market, leaving a significant short-term gap.
3. Constrained Alternatives
While some oil can be rerouted via pipelines or alternative shipping routes, these options only offset a fraction of disrupted volumes.
Together, these factors mean the market cannot easily rebalance itself.
Prices Likely to Stay Elevated
With supply constrained and demand relatively stable, the outlook for energy prices remains firmly upward.
ING’s base case suggests that oil markets will continue to trade at higher price levels as long as disruption persists.
This aligns with broader market behaviour:
- Prices have already surged sharply
- Volatility remains high
- Traders are increasingly pricing in longer-term risk premiums
In practical terms, this means energy costs could remain elevated for months, feeding through into inflation and industrial costs globally.
Governments May Need to Step In
If the disruption continues, ING suggests that coordinated government action may become necessary.
This could include:
- releasing strategic oil reserves
- implementing emergency energy policies
- coordinating supply responses across major economies
Such measures would aim to stabilise markets temporarily while supply chains adjust.
However, these are short-term solutions. They cannot fully replace lost production from the Gulf.
A Structural Shift in Energy Risk
The deeper implication of the ING analysis is that energy markets are entering a new phase.
Rather than isolated shocks, the industry is now facing prolonged geopolitical disruptions that can reshape supply-demand dynamics over extended periods.
Key takeaways include:
- Energy security is becoming a central economic issue again
- Supply chains remain highly vulnerable to chokepoints
- Price stability is increasingly difficult to maintain
The Outlook: Prolonged Uncertainty
There are currently few signs of de-escalation or a rapid return to normal energy flows.
As a result, markets are adjusting to a new baseline:
- tighter supply
- higher prices
- ongoing volatility
For businesses, governments and investors alike, the message is clear: this is not a short-term disruption to be waited out. It is a longer cycle of instability that will shape energy markets throughout 2026 and potentially beyond.