Energy Market Report - 19 March 2026
Energy markets were dominated by a dramatic escalation in Middle Eastern geopolitical risk, with Iranian missile strikes on Qatar's Ras Laffan LNG complex driving gas and power prices sharply higher. Carbon bucked the trend, falling to near eleven-month lows.
Natural Gas
Gas prices surged following overnight reports that Iran had launched retaliatory missile strikes on Ras Laffan - the world's largest LNG export facility - after earlier attacks on Iran's South Pars gas field. The NBP day-ahead settled at 135.50p/therm on Wednesday, up 8.20p/therm, but prices blew through that level on Thursday morning, with the April-26 contract trading around 173p/therm having briefly touched 175p/therm. The TTF equivalent was approximately €68.18/MWh. Summer-26 NBP hit three-year highs near 168p/therm, and even further-dated contracts such as Summer-27 and Winter-27 - which had previously resisted the geopolitical premium - were marked materially higher. The sheer concentration of global LNG capacity in the Gulf means any prolonged disruption at Ras Laffan would represent a significant shock to both Atlantic and Asian markets, with the JKM front month rising to $20.18/MMBtu. On the physical side, the UK system opened 6 mcm/day long on Thursday morning with demand around 201 mcm/day. Norwegian nominations fell 5.5% to 314 mcm/day on maintenance, and Langeled flows dropped sharply - down nearly 12 mcm/day to 48.20 mcm/day - with volumes being redirected to France where PEG commanded a premium over NBP. LNG send-out is picking up, with South Hook and Isle of Grain adding a combined 6 mcm/day, and total UK send-out expected to rise by around 10 mcm/day. EU storage stands at just 28.87% as of 17 March and continues to draw, adding urgency to summer refilling.
Electricity
Power prices tracked gas aggressively higher. UK day-ahead baseload settled at £113.75/MWh on Wednesday, up £3.82, with peak at £116.15/MWh, but Thursday morning saw the front-month UK baseload contract trading close to £130/MWh. The Summer-26 and Winter-26 UK baseload contracts were almost flat to each other at around £120/MWh - a notable compression of the seasonal spread that reflects near-term supply anxiety rather than structural demand shifts. Wind generation remains below seasonal norms across northwest Europe, though forecasts point to a recovery by the weekend which should offer some relief if it materialises. Nuclear availability is deteriorating: Heysham 2-7 tripped unplanned on Wednesday with a 315 MW impact, worsening to 545 MW from Thursday for an estimated 29 days. Combined with existing outages at Heysham 1-1, Torness-2 and Hartlepool-2, total lost nuclear capacity is now well above 2 GW, increasing reliance on gas-fired generation at precisely the point where gas prices are surging. System buy prices hit £185/MWh during the Wednesday evening peak.
Other Commodities
Brent crude settled at $107.38/bbl on Wednesday, up nearly $4, and gapped above $115/bbl on Thursday morning as reports emerged of strikes on Kuwaiti installations alongside the Ras Laffan attack. Iran has designated additional Gulf energy sites - including facilities in Saudi Arabia and the UAE - as potential targets, widening the scope of risk across the entire complex. Coal benefited from the rally and fuel-switching dynamics, with ARA CIF Cal-27 settling at $129.80/tonne, up $1.67. Carbon, however, continued to diverge sharply. EUA Dec-26 settled at €65.87/tonne and fell further to around €63.60/tonne on Thursday morning - near eleven-month lows. UKA Dec-26 settled at £36.79/tonne. The sell-off reflects expectations that extreme gas prices will destroy demand and trigger fuel switching away from gas-fired generation, reducing emissions and carbon demand accordingly.
Outlook
The critical variable is the extent and duration of damage at Ras Laffan. Any prolonged disruption to the world's largest LNG export hub would tighten global supply balances materially, with direct consequences for European storage refilling and summer gas pricing at a time when EU inventories are already well below comfortable levels. Iran's stated willingness to target additional Gulf infrastructure keeps the risk premium elevated, though partial de-escalation signals - including US warnings against further Iranian strikes on Qatar and indications that Israeli action on Iranian gas assets has concluded - suggest the situation could stabilise if diplomatic channels hold. In the UK, the physical picture is manageable for now, but the combination of reduced Norwegian flows, rising nuclear outages and low storage leaves very little margin for error should the geopolitical backdrop deteriorate further. Wind recovery over the weekend will be closely watched as a near-term pressure valve for the power market.