Wholesale Gas and Electricity prices continue to be volatile, given the constant changing dynamic of the Iran war.

That said, LNG from the Gulf only accounts for around 3% of total UK gas consumption, as the bulk of our supply comes from Norway via pipeline and the USA.

Unfortunately, spot gas prices are fixed in a global market and therefore, our relatively strong position is devalued by the disruption that the war has on global markets.

The big users of Gulf-sourced LNG are India and China, both of who are classed as ‘friendly’ states by Iran and therefore their vessels should be able to get through. Indeed, Indian vessels have been passing through the straits of Hormuz .

Going into the Summer, the UK’s reliance on fossil fuels for electricity generation will reduce, as solar and wind contribute over 50% of total production.

Finally, the US is self-sufficient as far as oil and gas are concerned, so there should be no disruption in supplies of LNG from the US.

In light of all of this, our view is that the current spikes are knee-jerk reactions, rather than based on any substance and that the market will drop back in the coming weeks / months.

Our advice, therefore, is to ignore the scaremongering by brokers chasing their next commission payment and hold tight, unless you have contracts expiring between now and the end of April.

If you do have contracts expiring anytime soon, our advice is to check your current supplier’s out of contract rates, rather than get locked into contracts priced at ‘war’ inflated rates. Another option is to enter into a short-term contract ending 30/09/26, so that your exposure to the war rates is limited and you can contract at normal rates during the Summer. This all depends on your view of the risks and where you think the war is going and every individual situation is different.

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