Snapshot - 18 March 2026
Energy markets remain firmly anchored by the Iran conflict, with Brent crude holding above $103/bbl and UK gas prompt prices around 127 p/therm. A drone strike on the Shah gas field in the UAE escalated the threat to regional production infrastructure, while Iran's retaliatory strikes on Tel Aviv overnight reduced hopes of near-term de-escalation. The Saudi Petroline rerouting to the Red Sea offers only a partial workaround for the Hormuz closure. Despite the geopolitical backdrop, milder UK weather and strong wind generation are keeping near-term gas and power demand in check, with the UK gas system opening comfortably long on Wednesday morning.
Forward gas and power curves softened on the day, with front-season NBP contracts trading around 123-125 p/therm and UK Summer 26 baseload near £95-96/MWh. The back end of the gas curve saw heavier selling, with contracts beyond 2027 falling 5-7 p/therm as the market prices the conflict premium as front-loaded. Carbon was notably weak after the EU signalled it may release additional allowances to contain emissions costs, with EUAs dropping over 3 per cent to EUR 66.65/tonne and UKAs falling to £37.11/tonne.
European gas storage sits just below 29 per cent - trailing last year by around 6 percentage points - and Norwegian flows have dipped with the start of maintenance at Aasta Hansteen. LNG arrivals to the UK are running behind last year's pace. Wind output is forecast to drop sharply over the next two days, which should lift gas-for-power demand and keep prompt power prices supported. EU talks on Thursday covering the Iran conflict and potential ETS reform will be the key watch item into the end of the week.
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