5 March 2026

Weekly Energy Market Update 

Outlook

Gas and oil markets have been extremely volatile this week. For example, the UK April gas contract reached 171.00 p/th on Tuesday morning, more than doubling from Friday’s level. With the exception of low gas storage levels (currently at 29.8%), underlying fundamentals remain broadly bearish. Industrial demand is weak, weather conditions are mild, and global LNG supply continues to grow. However, the de facto closure of the Strait of Hormuz, together with attacks on energy infrastructure in the region, has raised concerns about a potentially severe supply disruption. The key questions are how quickly the Strait of Hormuz can reopen and whether Qatari LNG production facilities will suffer significant damage. A prolonged disruption to exports from the Persian Gulf (lasting several months or more) would likely trigger another energy crisis. Conversely, a resumption of LNG exports within a few weeks would likely push gas and power prices back to last week’s levels, given the currently weak fundamentals.



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General Context
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Britain’s construction sector contracted for a 14th consecutive month in February, the longest downturn since the financial crisis, with a sharper decline in housebuilding weighing on activity despite improving business optimism.

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Global equity markets weakened in recent days as the Middle East conflict prompted a risk-off move, with rising oil prices fuelling concerns about inflation and the economic outlook.

Oil

Global oil prices surged this week as the escalating US-Israeli war with Iran disrupted supplies and closed the Strait of Hormuz, a critical chokepoint for roughly 20% of global oil shipments.

Goldman Sachs raised its second-quarter 2026 average price forecast for Brent crude by $10 to $76 a barrel and for WTI by $9 to $71, expecting reduced shipments through the Strait of Hormuz to sharply draw down OECD inventories and curb Middle East exports in March.
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Gas & Power
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QatarEnergy said it cannot fulfil its contractual obligations to LNG buyers following attacks on its facilities. The world's largest LNG producer (with a 20% share of the global LNG market) declared force majeure two days after halting its entire LNG output in the wake of an Iranian drone strike on the Ras Laffan facility.

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President Trump said the US Navy could begin escorting oil tankers through the Strait of Hormuz if necessary, adding that he had ordered the US International Development Finance Corporation to provide political risk insurance and financial guarantees for maritime trade in the Gulf.

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Russia could halt gas supplies to Europe in favour of Asia, President Putin warned on Wednesday, linking the possible decision to the EU wanting to ban purchases of Russian pipeline and LNG: "Now other markets are opening up. And perhaps it would be more profitable for us to stop supplying the European market right now,” he said.

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