Energy Market Report - 16 March 2026
Gas and power prices moved higher on Friday as the Iran conflict entered its third week with no diplomatic resolution in sight. The Strait of Hormuz remains closed, QatarEnergy LNG is in full shutdown, and milder weather across north-west Europe is providing only partial offset to a strongly bullish geopolitical picture.
Natural Gas
NBP settled at 126.00p/therm on Friday, with prices edging up to around 127.70p/therm this morning after weekend rhetoric intensified - President Trump warned NATO allies they would face consequences if they did not help reopen the Strait of Hormuz, while Japan and Australia both confirmed they would not deploy naval forces. The ongoing closure of the strait and QatarEnergy's full shutdown remain the dominant drivers. The latest analysis suggests it could take up to seven weeks to restore Qatari LNG production once the conflict ends, which has pushed the forward curve higher across all tenors - Sum-26 is now around 127p/therm and Win-26 near 124p/therm. On the supply side, Norwegian flows have recovered to 342 mcm/day as recent maintenance wound down, and UK LNG send-out is steady at around 60 mcm/day, with six cargoes expected at UK terminals over the next fortnight. European storage stood at 29.18% full as of 11 March. Milder weather is helping to ease demand - UK gas consumption has fallen to around 210 mcm/day with temperatures expected up to 4°C above seasonal norms midweek - but the fundamental relief is being overshadowed by the scale of the geopolitical disruption.
Electricity
UK power firmed on Friday, with the day-ahead baseload settling at £108.61/MWh. This morning, the front-month Apr-26 contract lifted above £100/MWh, driven by rising gas and oil costs feeding directly through to generation margins. Wind generation provided some relief last week, averaging around 15.2 GW - nearly double the week before - though output is forecast to decline below seasonal norms toward the end of this week, which could re-tighten the prompt. Nuclear availability remains constrained, with Hartlepool 2 still offline on an unplanned outage and several other units at reduced capacity. On the curve, Sum-26 baseload is indicated around £99.50/MWh and Win-26 near £99.00/MWh, both up on the week. European policymakers are expected to discuss interventions to offset rising power prices this week, reflecting growing concern about the impact on consumers and industry.
Other Commodities
Brent crude settled at $103.14/bbl on Friday - up over 11% on the week - and firmed to around $105/bbl in early Monday trading, after US strikes near Iran's Kharg Island oil terminal intensified fears of further escalation. The terminal reportedly remains undamaged, but the broader disruption to shipping through the Strait of Hormuz continues to support prices. Coal was marginally softer, with ARA CIF Cal-27 at $125.70/t. Carbon markets moved in the opposite direction to the rest of the complex - EUA Dec-26 settled at €69.16/tonne and UK ETS Dec-26 at £39.54/tonne, both near 11-month lows, as strong renewable generation and softer seasonal demand continue to weigh on the cost of emitting.
Outlook
The conflict in the Gulf remains the overriding driver across the energy complex. Until there is a credible path to diplomatic resolution or a reopening of the Strait of Hormuz, the risk premium looks entrenched - particularly given the extended QatarEnergy restart timeline. Milder weather and improving Norwegian supply are providing some near-term relief, but the fundamental picture is secondary to geopolitics for now. Key watchpoints this week include any shift in the diplomatic stance from NATO or China, European policy responses to rising power costs, and whether UK wind generation holds up as forecasts currently suggest a decline toward the weekend.