3 September 2026

Weekly Energy Market Update 

Outlook

Despite the US supposedly focusing on economic pressure on Iran, the past few days have seen yet another military escalation in the conflict. In addition, reports of a possible return to full-scale military action after the US midterm elections in early November, as the war enters its seventh month, highlight the risk that LNG exports from the region could remain disrupted for an extended period. Against a backdrop of very low European gas storage levels (currently at around 66%), this has driven another sharp increase in Winter 26 gas and power prices, which are now trading at levels not seen since January 2023. Looking ahead, the market is likely to remain on edge, with significant volatility expected if a hurricane develops in the Gulf of Mexico in the coming weeks or weather forecasts point to a cold start to winter.


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General Context
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European stocks have come under pressure this week as the latest military escalation in the Iran war pushed oil prices higher, fuelling concerns over inflation, tighter monetary policy and weaker economic growth.

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The latest BRC data showed UK shop price inflation rose to a more than two-year high of 1.5% in August, up from 0.9% in July, as higher energy, commodity and other input costs fed through to retail prices.

Oil

Brent crude prices rose sharply this week as renewed US-Iran strikes raised concerns over prolonged disruption through the Strait of Hormuz, with prices currently trading above $97/bbl.

Refined product markets also remain tight, with diesel prices up more than 50% from their 18th June low amid reduced Middle Eastern flows, damage to Persian Gulf refineries and Ukrainian attacks on Russian plants.

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Gas & Power
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Top Trump aides are reportedly pushing to prevent the Iran war from escalating ahead of the November midterm elections, amid concerns over Republican electoral losses. The administration plans to focus on economic pressure for now, although heavier US military action could be reconsidered after the election, according to sources.
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Despite tight hydro conditions in France and warm temperatures continuing to impact EDF’s nuclear generation, short-term power prices have fallen significantly thanks to a surge in wind generation across Europe. UK baseload for delivery tomorrow, for example, cleared at £94.48/MWh on N2EX, its lowest level since 9th August.

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US LNG exporter Cheniere has completed its Corpus Christi Stage 3 expansion in Texas, increasing its total production capacity by more than 20% to 56 million tonnes per annum. Following the handover of the seventh liquefaction train, the company is progressing a further expansion comprising two additional trains, both of which reached final investment decision in 2025.

Current Prices
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UK Gas (NBP) - Rolling 12-Month Average
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Sustainability Spotlight

Are we failing to uphold the Paris Agreement?

UNEP warns the world is now likely to exceed the 1.5°C warming threshold within the next decade. However, rapid action could limit the overshoot and bring temperatures back towards 1.5°C by 2100.

That would require global emissions to fall 26% below 2019 levels by 2030 and 46% by 2035 - well beyond current policy trajectories.

The technologies needed already exist, with wind and solar deployment accelerating and costs falling. But delay increases the challenge: every additional 0.1°C of warming could require vast amounts of future carbon removal. Cutting emissions now means lower costs, less climate damage and reduced long-term risk.
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