2 April 2026

Weekly Energy Market Update 

Outlook

Short-term power prices have averaged higher this week amid lower renewable generation across north-west Europe, with UK spot prices, for example, up 13% on last week. However, wind output is set to recover from tomorrow, alongside well above-normal temperatures through mid-next week.
Price direction in longer-dated contracts remained closely tied to developments in the Middle East, with gas, power and oil prices falling on hopes of de-escalation and equities rising, before reversing after President Trump signalled an intensification of strikes on Iran without committing to a timeline for ending the conflict. This leaves the outlook highly uncertain. Risks are skewed to the upside while the conflict continues, with ongoing disruption potential to energy infrastructure. A de-escalation and reopening of the Strait of Hormuz, by contrast, would likely push prices sharply lower.



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General Context
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Inflation in Germany and the eurozone rose to 2.8% and 2.5% respectively in March, the highest in over a year, driven by a surge in energy prices amid the conflict with Iran.

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British consumer sentiment fell to its lowest level in nearly a year in March, as households grew more concerned about the economic impact of the conflict and the risk of rising prices, according to GfK.

Oil

Brent crude rose more than $6 per barrel week-on-week as geopolitical tensions in the Middle East intensified. Growing expectations that the US may target Iranian energy infrastructure have added further geopolitical risk premium to prices.

OPEC oil output fell sharply in March to its lowest level since June 2020, as the conflict with Iran disrupted flows and effectively shut the Strait of Hormuz. Production declined by 7.3mn bpd to 21.57mn bpd, driven by cuts across key producers including Saudi Arabia, Iraq, Kuwait and the UAE.

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Gas & Power
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Japan will temporarily increase coal-fired power generation to offset LNG supply disruptions caused by the closure of the Strait of Hormuz amid the Middle East conflict. The plan includes suspending for one year the 50% utilisation limit on coal-fired power plants, potentially reducing LNG imports routed via the Strait by 10%.

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A tropical cyclone in Western Australia has disrupted output at major LNG plants operated by Chevron and Woodside, tightening a global market already strained by the Middle East conflict. Chevron signalled Wheatstone may take weeks to restart due to storm damage, partly offset by Gorgon’s recovery, with all three trains now back online at Barrow Island.

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Golden Pass LNG in Texas has begun producing its first liquefied natural gas, marking a key step towards full operations, with first exports expected in the second quarter. The project, owned 70% by QatarEnergy and 30% by ExxonMobil, will produce up to 25 bcm a year, adding significant capacity to global markets amid tight gas supply.

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

Crown Estate announces 6GW offshore wind leasing round.

The UK’s Crown Estate has unveiled plans for a new Offshore Wind Leasing Round 6 in the first half of 2027. A capacity of 6GW is expected, which would create 10,000 direct jobs and bring a potential economic boost of over £12 billion.

The sites would be concentrated in North-East England coast waters and further accelerate clean domestic energy growth.
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