As the second energy crisis of the 2020s continues, UK gas and power have surged by almost 14% and 12% respectively over the last week, with the front month returning to the levels last seen at the September peak, and contracts for next summer and the winter after reaching their highest since late 2022.
To be clear; this does not mean absolute price points for Winter 2026 are as high as the extremes seen before Winter 2022. For context, in August 2022, power prices for Winter 2022 at one point hit £740/MWh, whereas prices for the rest of winter 26 are currently trading around £170/MWh. What the 2022 comparison does mean is that, for energy buyers looking to secure gas and power volume specifically for delivery during the rest of 2026, Q1 2027 and Summer 2027, prices to do so have not been this high for over four years.
The rally has come without any single dramatic event to anchor it, although a key change was the character of the war. Iran has begun striking vessels well beyond the Strait of Hormuz, and two senior Iranian officials told Reuters that Tehran has adopted new tactics intended to keep oil prices high ahead of the US midterm elections on 3rd November, one of them saying that “It will be complete closure soon.” Houthi forces widened their own campaign from Saudi airports to Aramco facilities, and a cold spell is forecast for late October.
UK gas for November delivery traded at 214p/th on the morning of 14th October, 13.8% above the level at the time of our last update, with the first quarter of 2027 at 213p/th. Both spent the week above the psychologically significant 200p/th level, which the front month had not held since the end of September. Power moved with it, the November contract closing at £173/MWh and Q1 27 at £175/MWh, gains of 13.1% and 12.2% on the week. Day-ahead power swung violently on fluctuating wind generation, collapsing to £35/MWh on Friday 9th October before recovering to £152/MWh by Tuesday. Brent crude firmed to $106/bbl, while Europe’s key gas benchmark, the TTF, broke through €80/MWh to reach €87/MWh.
Within-day price movement was not all one-way. US President Donald Trump said on Thursday 8th October that “We will not be attacking Iran at any time prior to the midterm elections,” knocking the front month below 190p/th within the hour. Prices recovered the next session and kept climbing, the same statement having confirmed that the US naval blockade of Iranian ports stays in place.
As above, Iran’s campaign against shipping has meanwhile moved outside the waterway itself, with the IRGC Navy saying it struck an LPG carrier south of the Strait and that enforcement would no longer be confined to Hormuz. A tanker was also hit inside Qatar’s exclusive economic zone, the first such attack there in more than six months. Those are the waters through which Qatari cargoes pass once clear of the Strait, which matters because QatarEnergy has been quietly rebuilding exports using older tankers from its fleet, taking deliveries to approaching a third of pre-war levels by the end of September. Transits slowed again after an attack on a Qatari-linked vessel last week.
Houthi forces added a second front, with a missile attack on Riyadh’s King Khalid International Airport killing thirteen, and military spokesman Yahya Saree subsequently naming Aramco sites as “a legitimate target for our forces.” Saudi Arabia is not an LNG exporter, so a strike there would not of itself remove gas from the European market; the significance is the widening of explicit targeting from airports to energy production across the peninsula.
Closer to home, temperatures are forecast to fall from the middle teens to single figures by 19th October, with wind generation well below normal between the 18th and the 24th. That combination, cold and still at the same time, is the single biggest risk to the system this winter. Norwegian supply has at least held up, with exit nominations around 338mcm/d despite a run of unplanned outages.
European gas storage reached 73.94% on Monday 12th October, against around 83% a year earlier and a five-year average in the high 80s. ENTSOG, the network of European transmission operators, published its winter outlook during the week, finding that a coldest-since-2009 winter combined with the loss of a major import pipeline would force Europe to cut demand by 12% to 15%, although we should note this scenario was presented as a deliberately severe combination rather than a forecast.
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