9 July 2026

Weekly Energy Market Update 

Outlook

Volatility has returned to energy markets as strong fundamentals and renewed geopolitical risks have driven a sharp increase in gas and power prices. Winter 26 gas, for example, has risen around 10% week-on-week to 120.50 p/th, while UK day-ahead baseload power for delivery today cleared at £122.16/MWh. The Middle East will remain a key market focus, with participants closely monitoring tanker movements through the Strait of Hormuz, as well as any attacks on energy infrastructure that could lead to prolonged supply disruptions. Further damage to Qatar's Ras Laffan export facilities would be particularly bullish, especially given Europe's relatively low gas storage levels, which currently stand at 50.9%, around 10 percentage points below the same point last year.


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General Context
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German exports unexpectedly rose in May despite geopolitical tensions and the conflict in the Middle East, driven by a 23.1% month-on-month surge in exports to the US, while shipments to China also increased by 7.1%.

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The latest S&P Global PMI survey showed that the UK construction sector remained in sharp contraction in June, although the pace of the decline eased slightly from May's six-year low as weakness in commercial building activity moderated.

Oil

 

Oil prices have risen sharply after the US launched military strikes against Iran in response to attacks on vessels transiting the Strait of Hormuz. Trump’s subsequent declaration that the US-Iran MoU was “over” further heightened geopolitical tensions, supporting oil prices on fears of potential supply disruption.

Shipping through the Strait of Hormuz has been severely disrupted, with vessel traffic effectively grinding to a halt. Observable transits fell to just 14 vessels on Wednesday, well below the post-deal average of 34 and the recent peak of 59 on 24th June.

 
Oil

Gas & Power
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Several oil and LNG tankers have turned back from the Strait of Hormuz after a Qatari LNG tanker and a Saudi crude tanker were damaged on Tuesday in reported Iranian missile attacks. The diverted QatarEnergy LNG tankers were empty and heading to Ras Laffan to load cargoes before they reversed course.

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TotalEnergies has shipped the first LNG cargo from Mexico's Energia Costa Azul export plant to Asia, marking the start of commissioning ahead of full commercial operations this autumn. The 3.25 mtpa facility is Mexico's first LNG export plant on the Pacific coast. TotalEnergies will be the sole offtaker during the ramp-up phase before taking 1.7 mtpa under a 20-year agreement.

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On the Continent, low run-of-river output, reduced French nuclear availability due to environmental constraints, and a surge in demand from the ongoing heatwave are supporting power prices. In the gas market, high gas-for-power demand, combined with planned and unplanned outages at North Sea gas fields, is also keeping prices elevated.

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

UK ESG reporting rules are tightening in 2026

Significant changes to UK ESG regulation are coming, raising the bar on sustainability disclosure across environmental, social, and governance reporting. For large organisations, this means deeper, more standardised reporting obligations and real consequences for those that aren't ready. Regulatory penalties are one risk. Reputational damage with investors and stakeholders is another.
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