Gas and Electricity Year Ahead Wholesale costs are higher than last week. Oil is also higher at $108 from $98.
US military strikes against Iran appear to have paused, as have Iran’s attacks on their neighbour’s energy infrastructure. A series of ceasefire deadlines and threats have failed to find an agreement, and we have entered a period of economic pressure. Iran’s effective closure of the Strait of Hormuz still impacts on approximately 20% of global Oil and LNG supplies, which is creating shortages and price increases. The US is blockading Iran’s ports. Even when some kind of deal is made and energy exports can resume, the damage already sustained to Oil and LNG facilities in the region, will potentially take years for them to become fully operational.
The EU’s Gas Storage levels are just 32% full compared to 38% in 2025 and 62% in 2024. An EU ban on some Russian LNG supplies has just begun with a complete ban in January 2027. This means that Storage is even more important through the winter months and so will likely add pressure to Gas costs for the remainder of 2026. With Gas being an important and expensive source of Electricity generation for the UK, the markets are closely linked. The UK has large Renewable generation, which is typically cheap to run. However, some currently benefit from the higher market prices or generous schemes, so the government is looking to pressure them onto better deals for consumers.
The last week saw a low contribution of Wind to our Electricity mix at 14%, with 17% from Gas. Imports from Europe via the Interconnectors were a high 22%.
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 as required.
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