Energy Market Update: July 2026

Market News

June saw extreme volatility across gas, power, carbon and oil markets, largely driven by geopolitical tensions in the Middle East.

Concerns over escalating conflict involving the US, Iran and Israel increased fears around energy security, LNG supplies and potential disruption to shipping through the Strait of Hormuz.

As peace negotiations emerged and the key shipping routes started to reopen, both gas and oil prices fell sharply, although renewed tensions and ongoing supply concerns kept some geopolitical risk premium in the market.

But what does July have in store for frozen food businesses in the UK?

In this article:

• Learn how global energy markets are moving in July 2026.

• Understand the issues affecting business energy prices today.

• Discover what your business can do to manage risk in an unstable world.

Key Market Drivers

Key market driver	What happened	Price influence
Geopolitical tensions:	Escalation of military activity involving the US, Iran, Israel and Hezbollah during the first half of the month.	UP
	Repeated concerns over the security of the Strait of Hormuz and the potential disruption of global oil and LNG trade flows.	UP
	Announcement of a US–Iran peace agreement and subsequent ceasefire measures, leading to a sharp reduction in risk premiums.	DOWN
	Several interruptions and delays to peace negotiations, which repeatedly reignited market concerns.	UP
	Improved diplomatic progress toward month-end, including negotiation frameworks and limited sanctions relief, supporting confidence in continued de-escalation and shipping normalisation.	DOWN
Global supply/demand:	Strong Asian LNG demand throughout June, driven by higher seasonal temperatures. Increased competition between Asian and European buyers for LNG cargoes.	UP
	Growing confidence that Qatari LNG exports could recover relatively quickly, once LNG vessel movements through the Strait of Hormuz are more secure.	DOWN
Supply and storage	EU gas storage levels rising steadily from approximately 40% to 48% during June. But remain remaining around 9% below corresponding 2025 levels.	UP
	Strong Norwegian flows toward month-end reaching around 340 mcm/day, providing important supply support to Europe.	DOWN
Carbon market movements	UKA Dec-26 contracts trended higher through the month touching 4-month high of around £60p/ton driven by ongoing progress towards UK–EU ETS linkage	UP
Weather:	Weather impacts became increasingly important during the second half of June, with a significant European heatwave during the month which increased cooling demand and gas-fired generation requirements.	UP
	Reduced wind and hydro output supported power prices.	UP
	Higher temperatures created operational constraints for sections of the French nuclear fleet, providing additional support to power markets.	UP
	Forecasts show further possible heatwaves during July.	UP
Non-commodity costs:	Non-commodity cost set to rise through till the 2030’s driven by Transmission and green levy increases.	UP

Energy market outlook

Energy markets enter July with a more balanced outlook.

Improving LNG supply, strong Norwegian gas flows and continued progress in US–Iran negotiations should help limit price rises.

However, risks remain.

European gas storage levels are still below last year's levels, Asian LNG demand remains strong, and any disruption to Middle East shipping routes could quickly reintroduce a geopolitical risk premium.

Overall, prices are expected to remain volatile but broadly range-bound, with a slight downward bias unless geopolitical tensions or supply disruptions re-emerge.

Energy Price Movement

You can see the impact of the US/Iran conflict on gas prices from the end of February.

Gas price changes

Power (electricity) price changes

Wholesale forward price curve

Energy markets currently expect wholesale electricity prices in Winter 2027 to be lower than Winter 2026.

While prices remain volatile in the short term, traders believe supply conditions could improve over the next two years, helping to reduce costs.

However, these forecasts can change quickly if global events affect energy supplies.

How we can help

The world is changing. It can be scary. You know you need to stay on top of the news, but that can be difficult while focusing on running your business and serving your customers.

We get it. We can support you.

BFFF Energy Services exists to help businesses like yours make sense of their energy needs, simplify complex information and make smart decisions that lead to real change and reduced costs.

We are not here to sell you a quick fix. We're here to understand what matters to you, offer clear advice, and take ownership of the hard parts, so energy becomes one less thing to worry about.