Snapshot - 08 April 2026
European energy markets sold off sharply on 8 April following the announcement of a two-week ceasefire between the US and Iran, with Iran agreeing to reopen the Strait of Hormuz to full shipping traffic. Crude futures dropped around 15 per cent, dragging European gas and power lower. NBP front-month fell roughly 14 per cent from its 7 April settlement, while UK baseload power shed over 10 per cent on the prompt. Carbon was briefly higher early in the session before retreating.
The moves unwound much of the geopolitical risk premium that had built through March and over the Easter break, when Trump's escalating rhetoric against Iran had pushed near-dated contracts sharply higher. Gas fundamentals remain soft - UK demand is well below seasonal norms, Norwegian flows are steady, and EU storage continues to inject. Wind output dominated the UK generation mix on the morning, further weighing on power prices.
The key uncertainty is whether the ceasefire holds and converts into a lasting agreement. Reports that Iran may seek transit fees for Hormuz passage add a further complication. Planned Norwegian maintenance beginning this week will gradually reduce available supply through the summer. Forward curves repriced significantly on the prompt and near-curve but were less affected further out, suggesting the market views the risk premium reduction as largely a near-term event.
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