Our use of cookies May 2026 overview
The AquaSwitch business energy comparison service helps companies compare fixed-rate electricity and gas contracts. The rates on our comparison service are influenced by the wholesale prices of energy available in the market.
On 28 February 2026, the United States and Israel launched attacks on Iran. The conflict has disrupted the transit of ships through the Strait of Hormuz, a critical maritime chokepoint used by liquefied natural gas (LNG) ships that export natural gas from Qatar.
Qatar normally supplies approximately 20% of the world’s LNG, so global natural gas prices have risen sharply.
The wholesale gas and electricity markets in Britain have both been affected by the rise in global LNG prices, as Britain is a natural gas importer.
Pre-conflict natural gas prices in Britain were stable at approximately 80p/therm and have since risen to approximately 130p/therm.
Prices available on the wholesale market are currently highly volatile, affected by day-to-day developments in the conflict.
Wholesale gas prices
Source: Ofgem wholesale market indicators report
There are three important aspects of the British gas market that have meant it has been directly affected by the recent rises in the price of global LNG:
- Britain uses much more gas than it produces from the North Sea, so is a net importer.
- Pipeline gas from Europe remains constrained due to the ongoing conflict in Ukraine.
- Britain has only limited gas storage capacity to act as a back-up supply.
Consequently, the gas market relies on receiving expensive LNG by ship through Britain’s three gas import terminals, which feed gas into the National Transmission System.
Wholesale electricity prices
Source: Ofgem wholesale market indicators report
Wholesale electricity prices have also been affected by the conflict in Iran, rising from approximately £70/MWh to £100/MWh.
The national electricity grid relies on gas-fired power plants to meet electricity demand. This is especially true on still days when wind farms do not generate electricity.
The continued dependence on generating electricity through gas combustion means electricity prices closely track gas prices.
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