Snapshot - 03 March 2026
European energy markets surged on Monday and into Tuesday as the conflict in the Middle East escalated dramatically. Strikes across the Persian Gulf led to the shutdown of Qatar's Ras Laffan LNG facility and the closure of the Strait of Hormuz, removing around a fifth of global LNG and oil transit capacity. UK gas prices nearly doubled from Friday's levels, with day-ahead NBP settling at 114 p/therm and front-season contracts pushing well above 130 p/therm by Tuesday morning. Power followed sharply higher, with UK baseload moving towards £120/MWh as below-normal wind forecasts compounded the supply shock. Brent crude climbed above $77/bbl.
The scale of the move reflects the severity of the supply disruption. European gas storage is unusually low for early March at around 30 per cent capacity, and the summer-winter price inversion now visible on the NBP curve threatens to undermine refill economics ahead of next winter. Norwegian flows remain steady and UK LNG terminals are operating at healthy rates, but the market is pricing in the risk that a prolonged conflict could materially tighten global LNG availability.
Carbon was the exception to the rally. EUA Dec-26 held near €70/tonne and UK ETS allowances actually fell, weighed by continued political pressure for reform of the emissions trading system. Coal gained around 7 per cent on the week in line with the broader energy complex. All eyes remain on the Strait of Hormuz and whether Qatar can resume operations - any extension of the current disruption would likely push prices higher still, particularly if European wind generation continues to underperform seasonal norms.
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