Energy Market Update: June 2026

Market News

Energy markets experienced another highly volatile month, in large part due to ongoing tensions across the Middle East.

The US-Iran conflict continues to disrupt supply through the Strait of Hormuz with bouts of escalation and de-escalation painting a mixed picture of peace talks.

In this article:

• Learn how global energy markets have moved in June 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:	US–Iran tensions intensified throughout May and into the start of June, with repeated cycles of escalation, military posturing, and failed diplomacy.	UP
	Naval operations, drone strikes, and infrastructure attacks (e.g. UAE).	UP
	Breakdown of peace negotiations and entrenched political positions.	UP
	Expansion of regional tensions (including Israel-related developments).	UP
Global supply/demand:	Liquified natural gas (LNG) demand higher.	UP
	European LNG imports declined significantly during May. Strong Asian demand diverted supply away from Europe.	UP
	Ongoing disruption and risk to the Strait of Hormuz remains a key focus.	UP
	Delayed global LNG oversupply now expected post-2029.	UP
Supply and storage:	EU gas storage steadily increased through May (~34% to ~40%) but remains ~7–8% below last year levels and below 5-year averages.	UP
	Storage refill outlook consistently described as challenging ahead of winter.	UP
Carbon market movements:	UKA Dec-26 contracts trended higher through the month (~£50 to £57/t).	UP
	Carbon increasingly provided additional bullish support to power prices.	UP
Weather:	Weather introduced short-term volatility, but remained secondary to geopolitics.	DOWN
Non-commodity costs:	Non-commodity cost set to rise through till the 2030’s driven by network, policy and green levy increases.	UP
	The UK Government is considering Wholesale CfDs to reduce how much gas price influences electricity bills, but the scheme could add costs for consumers if fixed contract prices prove too high.	UP

Energy market outlook

Looking ahead, energy markets are expected to remain highly volatile and driven by geopolitical developments, particularly the trajectory of the US–Iran conflict and the status of the Strait of Hormuz.

Mixed progress in peace negotiations may trigger short-term price falls, but the absence of a lasting resolution will continue to maintain risks.

Supplies of liquefied natural gas (LNG) remain tight, European gas storage levels are lower than usual for this time of year, and strong demand from Asia is increasing competition for resources that is available.

Warmer weather and increased renewable energy generation may ease some pressure on prices during the summer months. However, underlying concerns about supply mean any major disruption could quickly push prices higher.

Analysts do not see wholesale prices dropping significantly in 2026 even if the conflict is resolved.

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.