Headlines:
- Limited Exports of Oil and Gas from the Middle East through the Strait of Hormuz.
- Increasing global competition for Gas supplies.
- EU Gas Storage is just 75% full.
What is driving wholesale costs higher?
On Monday 19th October, Gas and Electricity Year Ahead Wholesale costs were higher than last week, with small increases again this morning. Oil is also trading higher at $111 per barrel, up from $107.
There appears to be no progress in the peace talks between Iran and the US. The disruption to Oil and Gas exports continues as the US maintains its longer-term sanctions strategy. At the same time, global competition for LNG is increasing, particularly between Europe and Asia.
Could Europe have enough Gas in storage this winter?
EU Gas Storage is currently 75% full, compared to 83% at the same point in 2025 and 95% in 2024. A mild start to the heating season (October to March) has helped Storage levels continue to build, but inventories remain noticeably lower than in recent years.
What else is putting pressure on energy prices?
The EU has already banned some Russian LNG imports and plans to introduce a complete ban on Russian LNG from January 2027, followed by all Russian Gas imports by the end of 2027. Lower Storage levels, geopolitical uncertainty, and damage to energy infrastructure in both the Middle East and Russia are all adding pressure to wholesale costs.
The US has relaxed some sanctions against Russia and has encouraged the EU to do the same, although this currently appears unlikely.
How was Great Britain generating its electricity last week?
Over the past week, Gas provided 20% of electricity generation, Wind contributed 33%, and 13% came via Interconnectors.
Get in touch
We would encourage customers with contracts that end in the next few months to discuss your renewals with us, and we will look to provide further advice and support as required.
