26 March 2026

Weekly Energy Market Update 

Outlook

Short-term power prices have remained subdued, supported by strong renewable output and robust nuclear generation in France. For instance, UK day-ahead baseload for delivery yesterday cleared at £41.65/MWh, while the equivalent contract in France settled at €16.22/MWh. However, market focus remains firmly on the Middle East conflict, where a stream of often contradictory headlines continues to drive elevated volatility. Over the past week, UK Winter 26 gas has traded in a wide range between 126.00 p/th and 165.00 p/th, and is currently at 141.00 p/th. The outlook remains highly uncertain. Upside risks persist as long as the Strait of Hormuz remains closed, alongside the potential for further damage to Qatari LNG infrastructure. Conversely, any de-escalation and/or a partial reopening of the Strait would likely trigger a sharp downside correction in prices.



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General Context
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UK inflation held steady at 3% in February, but is expected to rise from March as higher fuel and commodity costs linked to the Middle East conflict feed through to prices.

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Britain’s growth outlook has been sharply downgraded by the OECD, which cut its 2026 forecast to 0.7%, the largest reduction among major economies. The organisation said higher energy prices and planned fiscal tightening would keep growth subdued.

Oil

Oil prices rebounded from Monday’s lows, with front-month Brent trading above $106/bbl, as hopes of a Middle East ceasefire receded after Iran signalled it would not enter negotiations, despite confirming receipt of a 15-point US proposal.

The IEA is preparing for a potential further release of strategic reserves as the Iran conflict continues to disrupt Middle East supply. The current 400mn-barrel drawdown (already the largest on record) represents only part of available stocks, leaving scope for additional intervention if needed.

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Gas & Power
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The European Commission is set to introduce an “emergency brake” on carbon prices under its emissions trading system, aimed at curbing volatility and easing pressure on industry as energy costs rise following the Iran war. The measure would halt the automatic cancellation of surplus permits, keeping more allowances in reserve that could be released if prices spike.

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SSE’s 150MW Ferrybridge battery storage project in West Yorkshire, one of the UK’s largest, is now fully operational and can meet peak electricity demand equivalent to nearly 250,000 households. The facility is expected to support grid flexibility as the UK expands storage capacity as part of its clean energy transition.

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The EU will press ahead with its planned exit from Russian gas by 2027 despite mounting LNG supply risks tied to the Middle East conflict, European Commission president Ursula von der Leyen said. The move comes as governments consider tax cuts and subsidies to cushion the impact of higher energy prices.

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

£1 billion funding boost for electric vans, trucks and depot charging.

The Department for Transport has announced £1 billion extra funding for businesses across the UK to switch to electric vans and trucks and install EV chargers at depots. This move supports fleet decarbonisation efforts and helps build resilience against global fuel price uncertainty.

To hit the national 2050 net-zero target, the government aims for all new HGVs in the UK to be zero-emissions by 2040.
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