Energy markets are volatile again. For businesses facing another round of uncertainty across oil, gas, and electricity, it can be tempting to treat today's disruption as another crisis to manage until markets settle. But history suggests that's the wrong conclusion.
Energy shocks are no longer isolated events. They're a recurring feature of the operating environment, and understanding your exposure to them is becoming an important part of building a more resilient supply chain.
Lessons learned from half a century of energy shocks
Today's energy volatility may feel exceptional, but history tells a different story. The International Energy Agency (IEA) traces a recurring pattern of disruption from the 1973 oil embargo and Iranian Revolution through the Gulf War, Russia-Ukraine gas dispute, Libyan civil war, and Russia's invasion of Ukraine in 2022.
Each shock has also prompted attempts to build greater resilience into the energy system. The IEA's World Energy Outlook 2025, for example, notes that gas stockholding requirements now cover 34% of net gas imports, compared with just 10% in 2015.
Yet the pattern continues. The current America-Iran conflict and closure of the Strait of Hormuz - a critical energy corridor that ordinarily carries around 20 million barrels per day of crude oil and petroleum products - represent the latest major disruption. The IEA has described it as the largest supply disruption in the history of the global oil market.
You cannot predict what will trigger the next crisis, when it will happen, or which part of the energy system will be hit hardest. But the pattern tells us that treating each shock as an isolated event to weather before returning to normal is becoming increasingly difficult to justify.
This time, look beyond oil
While oil dominates the headlines and provides some of the most accessible market data, businesses are exposed across interconnected energy markets, making this an energy system problem, not simply an oil problem.
ERM describes fossil energy price volatility and supply risk as structural business risks, with energy cost and security of supply becoming concerns particularly for energy- and gas-intensive operations.
Recent movements illustrate why. Since the current conflict began, ERM's analysis shows natural gas futures rising by 23% and German electricity futures by 62%, alongside significant volatility in oil markets.
Exposure also extends beyond the energy purchased directly. It can sit within manufacturing, industrial heat, logistics, electricity contracts, and your supplier base. An upstream disruption can quickly become a cost, continuity, or competitiveness issue further down the supply chain.
That's why a passive “wait-and-see” approach carries its own risk. ERM warns that delaying action can lead to rushed decisions later, potentially locking in higher costs, carbon exposure, or operational constraints.
Decarbonization and resilience are converging
Traditionally, you may have treated energy volatility as a procurement and finance challenge, while carbon reduction sat predominantly with your sustainability team. Increasingly, those conversations need to overlap.
Decarbonization and resilience aren't automatically the same outcome. You could make significant progress against your emissions targets while remaining highly exposed to volatile energy markets. That's why energy exposure needs to become part of scenario planning and supplier risk assessments, rather than being considered through carbon targets alone.
For sustainability leaders, this means looking beyond where your emissions are highest to understand where energy dependence creates vulnerability:
- Which operations rely heavily on gas?
- Where are your suppliers exposed to volatile energy costs?
- Which processes could be electrified or made more efficient?
- And where could greater diversification reduce reliance on a single energy source?
Reducing emissions remains the goal, but understanding energy exposure can help you identify opportunities where decarbonization delivers something more: a supply chain that is both lower carbon and better equipped to withstand future disruption.
Resilience in practice
There is no single route to reducing your energy exposure, but some organizations are already demonstrating how energy strategy can support both decarbonization and wider business resilience.
General Motors (GM), a customer of Secaro, recently became the first U.S. automaker to achieve its goal of matching 100% of the electricity used across its U.S. operations with renewable energy. Its approach involves contracting enough renewable energy to match every kilowatt-hour of electricity consumed, while prioritizing projects connected to the same regional grids as its facilities.
Long-term energy agreements offer another route. Telefónica, for example, has used long-term power purchase agreements (PPAs) as part of its renewable energy strategy, explicitly identifying reduced exposure to market volatility as one of the commercial benefits.
These are different approaches, but they demonstrate the same broader principle; your energy strategy can help you manage carbon and commercial exposure together. As Microsoft's Global Vice President for Energy has argued,renewable energy can provide greater price stability once installed, while maintaining flexibility between energy sources becomes particularly valuable during periods of conflict or scarcity.
For procurement teams, this broadens the resilience conversation. Long-term PPAs and diversified supply contracts can help reduce your direct exposure to market volatility, while efficiency, electrification, onsite generation, and storage may provide other routes depending on your operations.
But your own energy strategy is only one part of the picture. The suppliers you select, the energy sources they depend on, and the resilience of energy-intensive manufacturing processes can all influence your future costs and continuity.
Your suppliers' energy exposure is your exposure too
Managing your direct energy exposure is only part of the picture. Your resilience also depends on the suppliers you rely on, and significant vulnerability within one critical part of the supply chain can quickly have consequences further downstream.
Consider a supplier whose manufacturing processes depend heavily on natural gas. A sudden increase in gas prices can raise production costs or disrupt operations altogether. Those pressures can ultimately reach you through higher prices, reduced capacity, longer lead times, or continuity issues.
Secaro's supplier data demonstrates how concentrated that exposure can be across different industries. In automotive, natural gas and liquefied natural gas (LNG) account for 93% of direct emissions across supplier facilities reporting on the Secaro platform. In consumer goods, 84% of Scope 1 emissions come from fossil-fuel combustion, with natural gas alone accounting for 62.3%.
The industries may be different, but the underlying risk is similar. When supplier operations are heavily dependent on a small number of fossil fuels, energy price volatility can become a direct cost and continuity risk. Reducing reliance on fossil-fueled process heat can therefore contribute to both decarbonization and greater resilience to energy market instability.
Prepare, don’t predict
You cannot know for certain what happens next in energy markets. But you can understand where you're exposed; which suppliers and processes depend most heavily on volatile fuels, where efficiency, electrification, or diversification could reduce that dependence, and whether energy risk is adequately reflected in your procurement and supplier decisions.
This is no longer simply about reacting to the crisis in front of you. Energy volatility is a structural supply chain risk, and treating it as such means building it into planning and procurement in the same way you increasingly build in supplier requirements and emissions data. The next energy shock may be impossible to predict. Your exposure to it doesn't have to be.
