The Rangers man's first half goal looked like it would get his country's first win on the board in World Cup qualifying.
However a late own goal gave Luxembourg an unlikely and largely undeserved point.
Shiels had already been replaced when the equaliser was struck and the home side had little time to remedy things in Belfast.
It was a cruel blow for Shiels and his country men as they had looked likely to bounce back from last week's defeat to Russia.
The Gers new boy had produced a classy finish after just 14 minutes to seemingly put the home side in control.
However the late leveller and dropped points leave Michael O'Neill's side five points behind both Russia and Portugal in Group F with their next match away in Portugal next month.
Elsewhere, on-loan Ger Carlos Bocanegra was back at the heart of the USA's defence as they earned a 1-0 win over Jamaica in Columbus, Ohio.
