UPDATE: Middle East conflict and global energy markets

March 2026

Latest: Escalating tensions in the Middle East are causing renewed volatility in global energy markets, affecting UK gas and electricity prices.

At the centre of concern is the Strait of Hormuz, a critical route for around 20% of the world’s oil supply and a significant portion of global Liquified Natural Gas (LNG) exports. Recent attacks on vessels and reduced LNG output from Qatar have disrupted flows, particularly to Asian markets, while global uncertainty is pushing prices higher worldwide.

Why UK prices are rising

Although the UK does not rely heavily on Middle Eastern energy imports, global markets are closely linked. Prices are reacting due to:

LNG supply concerns as Europe depends more on global imports
Rising oil prices, which still influence gas markets
Geopolitical risk premiums added by traders
Electricity pricing, which follows gas market movements

Not a repeat of 2022

While the situation may feel familiar, the fundamentals are stronger than during the 2022 energy crisis. Europe is less reliant on Russian gas and has greater access to LNG, particularly from the US, making the system more resilient overall.

What this means for 2026 renewals

For organisations with contracts renewing in 2026:
Prices have risen recently but remain broadly in line with last year
Current volatility is largely driven by sentiment, not supply shortages
Risk premiums could fall quickly if tensions ease

For later 2026 renewals, there may be value in monitoring the market or considering flexible purchasing strategies to avoid locking in during short-term spikes.

Key takeaway

Despite increased volatility, this is not a return to crisis conditions. A measured, strategic approach to energy procurement – rather than reacting to headlines – is the most effective way to manage risk.