Scenarios 2027 / Scenarios
Rated at Standard Severe. Likelihood type: systemic. Source of scores: ginc-desk-v0.2.
The strait reopened in the autumn and prices did not come down. Two producers had lost export capacity to strikes on their terminals; the insurers were pricing the next closure; and the gas market, which had tolerated one winter of rationing, would not tolerate a second without a premium. European industrial gas prices sit at four times their 2024 level and the fertiliser, glass and chemicals plants that survived 2022 close in a second wave. Central banks raise rates into a supply shock for the second time in a decade and governments spend 3 per cent of GDP on energy support they cannot afford. Coal plants scheduled for closure run flat out; emissions targets are suspended 'temporarily'. In South Asia, LNG cargoes are diverted to higher bidders and power cuts return to eight hours a day. In Africa, diesel for generators and water pumps costs more than the clinics' budgets. The countries with storage, interconnection and domestic renewables ride it out; the ones that had treated energy security as a price question find it was a capability question.
The dateline is illustrative, not a forecast. The narrative is hypothetical; the historical anchors below are real events.
Oil prices double and gas prices quadruple for 18 months after a Gulf conflict or a supply cut, with physical shortages for the most exposed importers. The Bank of England's 2025 stress scenario supplies the calibration (oil up more than 100 per cent, gas more than 300 per cent, inflation to 10 per cent, policy rates to 8 per cent). Distinct from S05: a chokepoint closure is one cause; pipeline cut-offs, sanctions and producer decisions are others, and the shock persists after the strait reopens.
| Event | Date | What happened | Calibrates |
|---|---|---|---|
| Russian gas cut-off | 2022 | European gas (TTF) peaked near €340/MWh in August 2022, roughly ten times pre-crisis; demand destruction and fiscal support worth hundreds of billions | gas multiple, fiscal cost |
| Hormuz closure | March 2026 | Crude up 28 to 35 per cent in ten days; Brent above US$92 | onset speed |
| Oil embargo | 1973–1974 | Prices quadrupled; rationing in importers | Standard Extreme precedent |
| Bank of England 2025 stress scenario | March 2025 | Oil +100 per cent, gas +300 per cent; UK CPI 10 per cent; Bank Rate 8 per cent | Standard Severe parameters |
| Iran–Iraq tanker war | 1984–1988 | Sustained attacks on Gulf shipping without full closure | prolonged risk premium |
Shown at their preset values. Parameters are not adjustable in this release and nothing on this page is computed from them. Custom settings run (Phase B) but are labelled 'non-standard run' and excluded from comparisons.
| Parameter | Default | Range or options | Note |
|---|---|---|---|
| Oil price multiple | ×2 | ×1.5 to ×3 | — |
| Gas price multiple | ×4 | ×2 to ×6 | — |
| Duration of price regime | 18 months | 6–36 | — |
| Physical supply loss | 10 per cent of imports | 0–25 | — |
| Strategic stock coverage | 90 days | 30–180 | — |
| Policy rate response | hikes | — | BoE regime |
High: capability band shifts expected under current plans. Medium: band shifts under 'none' policy response only. Low: strain without band shift. Loads are judgement-based until the Atlas connects. Domains link to the Atlas.
| Domain | Load | Channel |
|---|---|---|
| Hard | ||
| Defence and security | Medium | fuel for operations; budget compression |
| Strategic infrastructure | High | storage, interconnection, generation mix, grid stability |
| Critical technology | Low | energy-intensive compute and fabs |
| Soft | ||
| Government effectiveness | High | allocation, subsidies, monetary–fiscal coordination |
| Human capital | Medium | energy poverty; health effects |
| Influence and cohesion | Medium | public tolerance; producer leverage |
| Economic | ||
| Macro-financial | High | inflation, rates, fiscal cost, current account |
| Industry, trade and supply | High | energy-intensive industry closures |
| Energy and resources | High | supply security, mix, storage |
| Region | Exposure | Rationale |
|---|---|---|
| North America | Low | Net exporter; price pass-through |
| Europe | High | Gas import dependence |
| China | Medium | Coal buffer; crude imports |
| Indo-Pacific | High | Japan, Korea, Taiwan, Philippines |
| South Asia | High | LNG and crude imports; power cuts |
| Gulf and Middle East | Low | Windfall; except conflict parties |
| Africa | High | Diesel dependence, no fiscal space |
| Latin America and Caribbean | Medium | Mixed producers and importers |
| Russia and Eurasia | Low | Windfall |
| Indicator | Source | Threshold |
|---|---|---|
| Brent, TTF, JKM spot and forward curves | — | — |
| OPEC spare capacity | — | — |
| Gas storage fill | AGSI | — |
| Strategic petroleum reserve days | IEA | — |
| Energy-intensive output indices | — | — |
| Energy subsidy announcements as share of GDP | — | — |
| Coal plant life-extension decisions | — | — |
From the GINC 250: trends rated Very high or Critical for this scenario. All S09 trend scores.
| Rating | Band or level | Why |
|---|---|---|
| Likelihood, two years | 4Likely | 2022 and 2026 both produced shocks within the Standard Severe range on at least one fuel. |
| Likelihood, ten years | 5Highly likely | — |
| Systemic impact | 4Severe | On the 2022 output and fiscal costs. |
| National impact | 4Severe | — |
| Confidence | high | — |
Source of scores: ginc-desk-v0.2. Confidence refers to the rating, not the scenario. Calibration sources are listed with the anchors above and on the methodology page.
Contested assumptions for the panel to resolve.
No signed commentary in this build.
0.2.0 · active0.2.0 · 2 October 2026 · Entered the Library at v0.2 with GINC desk scores.GINC (2027). Scenario S09 Energy supply shock, Scenario Library v0.2. scenarios.ginc.org/library/energy-supply-shockContent and data are published under CC BY 4.0.