Energy markets have moved sharply following a significant escalation in tensions between the United States and Iran, with immediate concerns around disruption to the Strait of Hormuz – a critical route for global oil and LNG supply.
The UK market has experienced extreme volatility, with prices rising considerably across near-term delivery and further along the curve. This indicates a substantial geopolitical risk premium now embedded in contracts.
While prices eased from their intraday peak, markets remain highly headline driven. As seen during the previous energy crisis, supply disruption combined with low storage can quickly translate into sustained pricing pressure. If disruption is short-lived, markets may retrace. If it persists, further structural repricing becomes increasingly likely.
Key risks currently influencing markets include:
• Qatar Energy declaring force majeure on LNG exports
• Reports of marine war-risk insurance being withdrawn in the Gulf
• Potential shipping disruption and rerouting
• European gas storage at just 30%, well below seasonal norms
Market sentiment continues to be dominated by escalating tensions in the Middle East. Strikes into Iran continued overnight, with President Trump initially suggesting a 4–5 week timeline before indicating the campaign could be more open-ended. Iran has issued threats against vessels attempting to pass through the Strait of Hormuz, warning it may target ships using the route. Oil prices have risen to year-long highs, with reported impacts on regional oil and gas infrastructure adding further upside risk to energy markets.
Businesses currently exposed to wholesale movements particularly those out of contract, on flexible arrangements, or with upcoming renewals, should review protection strategies in the current environment. FIS members are reminded that they can take advantage of a free energy health check from Enexus Energy as part of their membership
Enexus are actively monitoring developments and can discuss appropriate cover where required. FIS Members can contact Andy Radcliffe directly on 01253 966961 and andy.radcliffe@enexusenergy.co.uk
Information correct as of 10am on 3 March 2026
