UK Energy Market Update: 26 October 2026

UK gas rose again last week and reached a fresh multi-year high. Trading Economics' UK gas price, a contract that tracks the NBP benchmark, rose to around 231p per therm on Friday 23 October. That was up about 4% on the day and more than 20% on a month earlier.

The main new driver was escalation in the Gulf, where attacks are now reaching Saudi Arabia. The disruption to Qatari LNG hasn't gone away either.

Gulf tensions are spreading

Several separate things happened last week. Houthi attacks on Saudi Arabia stepped up, and at least two people were killed in an attack on an airport in Dammam, according to Saudi state media. On Wednesday the US ordered non-emergency government staff and their families to leave Saudi Arabia. Reuters also reported that Saudi Aramco told staff to evacuate its Dhahran headquarters and work remotely, although the reason wasn't clear.

Brent crude topped $113 a barrel on Thursday, its highest since May. Separately, The Times reported that the US and Israel have drawn up plans for fresh strikes on Iran after the US midterm elections on 3 November, and Trump told reporters that action on Iran could come soon.

The reported targets were mainly airports, government buildings and oil sites, not gas supplies, so the link to UK gas is indirect. Traders are pricing in the risk of a wider conflict on top of the existing LNG disruption.

That disruption is still real. QatarEnergy has told Italy's Edison it won't deliver cargoes until at least the first half of December, and Edison has been replacing much of the missing supply with US LNG bought on the spot market. That leaves European buyers competing for available cargoes as winter approaches.

Europe's storage buffer keeps thinning

European gas storage was around 74.6% full on 18 October, roughly 15 percentage points below the five-year average, according to GIE data. GIE describes storage as being at historically low levels heading into winter. Injections are slowing as temperatures drop, so there is little time left to close the gap.

Britain's own supply outlook is steadier

NESO and National Gas published their full winter outlooks on Friday. NESO forecasts a 5.9GW electricity surplus, a 9.5% buffer above peak demand. National Gas puts supply capability at 592 million cubic metres a day, against expected peak demand of 493 million. Both say only a rare combination, such as extreme weather alongside major supply disruption, would create material problems. On their current assessment, the bigger risk this winter is price rather than supply.

What this means for your business

Cornwall Insight expects the household price cap to rise by around 16% in January, to £1,999 a year for a typical household. That is a household forecast, not a forecast of business energy costs, and it was made before gas climbed again, so it could move. Ofgem's cap doesn't apply to business contracts, but the same wholesale prices feed into them. Ofgem's January announcement is due by 25 November.

If you've got a renewal in the next few months, now is the time to check how much of your usage is still open to the market and what price you'd be comfortable fixing at. Waiting for a calm week hasn't paid off lately.

Also worth knowing

The Competition and Markets Authority has dismissed an appeal against Ofgem's decision to reject CMP344. The proposal would have moved certain unexpected costs linked to the offshore transmission connections of some wind farms from those generators onto electricity users more widely, through network charges. It won't change your bill on its own, but network costs are part of what businesses pay, so rulings like this are worth following.

What we're watching next

• Whether US and Iran tensions escalate around the 3 November midterms

• Houthi attacks in the Gulf, the oil price and any sign of impact on gas or LNG supply

• European storage levels as colder weather arrives

• Weather and wind forecasts for the start of winter

• Ofgem's January price cap announcement, due by 25 November

Have you reviewed your exposure ahead of the cap announcement, or are you waiting to see where gas settles? Tell us in the comments.