Energy markets moved sharply higher last week following significant escalation in tensions

between the United States and Iran, with immediate concerns around disruption to the Strait of Hormuz – a critical route for global oil and LNG supply.

The UK market has experienced extreme volatility, with prices rising considerably across near-term delivery and further along the curve. This indicates a substantial geopolitical risk premium now embedded in contracts.

While prices initially eased from their intraday peak, markets remain highly headline driven. Monday 9th March saw the markets open back towards the initial peak due to . As seen during the previous energy crisis, supply disruption combined with low storage can quickly translate into sustained pricing pressure. If disruption is short-lived, markets may retrace. Ifit persists, further structural repricing becomes increasingly likely.

Key risks currently influencing markets include:

• Qatar Energy declaring force majeure on LNG exports

• Reports of marine war-risk insurance being withdrawn in the Gulf

• Potential shipping disruption and rerouting

• European gas storage at just 30%, well below seasonal norms

Market sentiment continues to be dominated by escalating tensions in the Middle East. Strikes into Iran continued overnight, with President Trump initially suggesting a 4–5 week timeline before indicating the campaign could be more open-ended. Iran has issued threats against vessels attempting to pass through the Strait of Hormuz, warning it may target ships using the route. Oil prices have risen to year-long highs, with reported impacts on regional oil and gas infrastructure adding further upside risk to energy markets.

With no end in sight with the conflict, the bottle neck and supply disruption through the Strait of Hormuz is starting to impact further dated commodity contracts as global energy comes under pressure to meet demand.

The below graph shows the high impact on near term prices. Interestingly, at present, April 2027 (orange line) delivery costs have not been effected as badly. Meaning businesses with April 2027 or October 2027 renewals can review costings early and potentially safeguard future prices.

Taste Of The West Members members currently exposed to wholesale movements particularly those out of contract, on flexible arrangements, or with upcoming renewals, should review protection strategies in the current environment.

Taste Of The West members can contact Andy Radcliffe of Enexus Energy direct on 01253 966964 or email andy.radcliffe@enexusenergy.co.uk to share any concerns or to asses how the market affects future delivery.