UK gas contracts are holding close to four-year highs as of the morning of Wednesday 16th September, albeit well below the peaks of the 2022 crisis, with the front of the curve trading either side of 200p/th. At time of writing, the October 26 contract is at 198p/th, down 0.2% on the previous close and 1.6% above the level at the time of our last update, while Q4 26 is 0.4% lower at 201p/th. Winter 26 has edged 0.2% higher to 202p/th, a gain of 4.1% on the week, and day-ahead gas is up 1.3% at 200p/th. Further out, the curve remains steeply backwardated, with Summer 27 at 135p/th and Winter 27 at 127p/th.
Power forwards also sit near four-year highs, with October closing at £153/MWh and Winter 26 at £162/MWh on Tuesday 15th September, 4.1% and 5.9% higher than a week ago. Day-ahead power has been far more volatile. A lull in wind sent it to an 18-month high of £176/MWh on Thursday 10th September, a level last seen in January 2025, during the tight winter period. As of the morning of Wednesday 16th September it has fallen 31.9% to £114/MWh, with wind output forecast close to 14GW against a seasonal norm nearer 7GW.
UK gas first broke through 200p/th on the afternoon of Wednesday 9th September, after Ukrainian drones struck a gas condensate plant in Russia’s Yamal-Nenets region, which produces roughly 80% of Russian gas, and Iran claimed attacks on 10 ships near Hormuz. The October contract peaked at 208p/th on Friday 11th September and ended the week more than 11% above its close of 179p/th on Friday 4th September. Monday 14th September brought a second surge, with Q4 26 reaching a fresh four-year high of 212p/th. A 3.4% sell-off on Tuesday 15th September, driven in part by profit-taking ahead of the US Federal Reserve’s rate decision, took the front month back to 198p/th, broadly where it trades at time of writing.
Houthi forces took control of Yemen’s entire Red Sea coastline over the week, seizing Mokha, Perim Island inside the Bab al-Mandeb Strait and the Hanish islands between Thursday 10th and Monday 14th September. UN Special Envoy for Yemen Hans Grundberg said the advance gave the group “a direct presence on the approaches to one of the world’s most vital straits.” From a UK gas and power perspective, it should be noted that LNG transits of the Bab al-Mandeb had already fallen to a single cargo in 2025, so little gas is directly at risk, but the move adds a further war risk premium. US Vice President JD Vance confirmed that Washington is in “direct conversations with the Houthis themselves.”
Gulf foreign ministers were due to meet their Iranian counterpart in Salalah on Monday 14th September to endorse a temporary Iran-Oman arrangement for shipping through Hormuz. Omani Foreign Minister Sayyid Badr Albusaidi announced the meeting “has been postponed until a later date,” with no new date set. Bahrain, which declined to attend, insisted that any arrangement must involve all Gulf states and that transits “must be without fees.” US Secretary of State Marco Rubio spoke with Mr Albusaidi on Tuesday 15th September, condemning “recent Iranian attacks on commercial ships and countries in the region.”
Shipping through Hormuz remains in single digits, with seven transits on Wednesday 9th September, none of which were LNG carriers. These transit numbers remain a fraction of the pre-war norm of more than 130 a day. On the morning of Wednesday 16th September, the IRGC Navy reported that the supertanker EL GAIA had caught fire after striking naval mines south of the Strait. Amid the disruption, QatarEnergy has cancelled a further five cargoes due between late September and early November and is reported by Reuters to be seeking multi-year supply from US producers through 2031, following long-term damage to its Ras Laffan LNG facility in March 2026. Speaking at Gastech, Shell’s President of Integrated Gas Cederic Cremers warned that even a reopening of the Strait would not bring an immediate return to pre-war flows.
European gas storage reached 68.49% on Tuesday 15th September, still the lowest on record for the time of year and around 2.5 percentage points below the previous low in 2021. HSBC expects inventories to reach only 73% by 1st November, the lowest since data collection began in 2009.
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