Middle East Conflict: Energy Market Impact & Price Volatility

Market Overview

Energy markets have moved sharply higher following escalating geopolitical tensions in the Middle East.

Coordinated US and Israeli strikes on Iran over the weekend have triggered retaliatory action, widening the conflict across the region and increasing supply risk across global energy markets.

Disruption in the Strait of Hormuz, alongside precautionary shutdowns of oil and gas infrastructure, has materially increased market volatility.
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Gas Markets

European gas markets opened significantly stronger, with front-month contracts rising more than 20% compared to the previous session.

The NBP Apr-26 contract is currently trading near 98.15 p/th, having breached the key 100.00 p/th level earlier in the session.

The TTF front-month contract is trading around 38.45 €/MWh after moving above 40.00 €/MWh earlier in the day.
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Key Drivers

Escalating regional conflict

Vessel disruption in the Strait of Hormuz

Reports of attacks on commercial shipping

Ongoing uncertainty regarding the duration of military operations

Despite the geopolitical premium, underlying fundamentals remain relatively balanced. Temperatures are forecast to remain above seasonal norms, which may limit storage withdrawals.

European gas storage levels are currently around 30%, while LNG flows into Europe remain strong, supported by record US feed gas supply.
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Power Markets

European power markets have followed gas higher.

The UK Baseload front-month contract is trading near 83.00 £/MWh, up approximately 16% on the previous session.

The German Baseload equivalent is trading around 80.80 €/MWh, up roughly 10%.

Declining renewable generation is also adding support. Wind speeds across North West Europe are forecast to remain below seasonal averages for the next two weeks, increasing gas-for-power demand.

Brent crude has strengthened by approximately 8%, currently trading near 78.60 $/bbl amid supply concerns.

Carbon markets remain under pressure, with the Dec-26 EUA contract trading below 70.00 €/t CO2e following renewed political scrutiny of the Emissions Trading System.

Regional Supply Developments
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Recent reports indicate:

Qatar has temporarily halted LNG production

Saudi Arabia has shut its largest domestic refinery following a drone strike

Oil production in Iraqi Kurdistan has been suspended

Several major Israeli gas fields have reduced output, impacting exports to Egypt

These precautionary shutdowns are contributing to heightened uncertainty across global energy markets.
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What This Means for UK Businesses

The market is currently pricing in geopolitical risk and supply disruption.

While underlying fundamentals are not yet structurally tight, volatility is elevated and further price swings remain possible.

Businesses with upcoming contract renewals or exposure to wholesale pricing should review procurement strategies carefully.

Advantage Utilities continues to monitor developments closely and will provide further updates as the situation evolves.


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The information and insights presented here are for general informational purposes only and do not constitute financial, investment, or procurement advice. Whilst every effort is made to do so, we cannot guarantee the accuracy of the information contained. It should also be noted that market conditions can change rapidly and past trends are not guarantees of future performance.

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