Gas and Electricity Year Ahead Wholesale costs are lower than last week. Oil is higher at $100 from $92.
Energy prices continue to react to events in the Middle East, as the initial action by Israel and the US against Iran is now impacting on Iran’s neighbours in the form of attacks on energy infrastructure and their ability to produce Oil and LNG. With the Strait of Hormuz being effectively closed due to Iran targeting shipping, the US has asked for military assistance to escort vessels. The dilemma is that many nations have been outspoken against the war and do not want to be drawn into the conflict, but without exports from the region, global economies will suffer due to higher energy costs and inflation. China seems even more likely to move ahead with a long-delayed decision to allow the building of the, Power of Siberia 2 pipeline, providing more Gas from Russia.
The EU’s Gas Storage has stabilised but remains below last year at 29% full compared to 35% and 60% in 2024. The usual filling of Storage from April may be delayed or slower due to the high cost and competition for LNG, notably from Asia. Whichever region pays the most will get the Gas. The EU tends to buy larger quantities from the US, whereas Asia’s comes from the Middle East and Australia. The EU’s ban on Russian LNG from January 2027 will add another price pressure through the remainder of 2026. The US has eased some sanctions against Russia, something the EU may need to consider if there is no improvement to supplies through the summer.
Electricity prices are increasing due to the contribution of Gas to generation, which was 18% of supplies last week.
We would encourage any customer with a contract that ends in the next few months, to discuss your renewals with us and we will look to provide additional market intelligence, guidance and support, for your unique circumstances.
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