Energy Market Update – 23 June 2025
Energy prices climbed as geopolitical risk surged, with US strikes on Iranian nuclear sites and Iran’s threat to close the Strait of Hormuz fuelling market uncertainty and driving gas and power price increases.
UK natural gas markets opened the week higher, reacting sharply to news that the US had launched targeted attacks on Iranian nuclear facilities, with Iran subsequently threatening to block the Strait of Hormuz—a critical passage for global energy trade. The NBP front-month contract traded as high as 99.45p/therm before settling at 96.70p/therm, up from Friday’s close of 96.19p/therm. These developments introduced significant risk premium into gas pricing despite relatively bearish fundamentals. UK system demand opened long at 116mcm, nearly 13mcm below the previous day, aided by the return of Norwegian flows, with Langeled nominations rising to 51mcm, up from 38mcm. LNG send-outs remained stable at 14mcm, supported by new arrivals at Isle of Grain and South Hook terminals. Across Europe, TTF spot prices also increased to €40.25/MWh, reflecting widespread concern over supply reliability amid geopolitical tensions.
UK power prices followed suit, with the baseload front-month contract rising to £83.25/MWh, up from £81.85. The previous session had seen notable declines due to stronger renewable generation, particularly wind and solar, which averaged 11.2GW on Friday—a 26% increase from Thursday—subduing gas-for-power demand. However, the escalation in the Middle East conflict has reignited risk sentiment. With speculation around potential regime change in Iran and the possibility of disruptions in energy transportation, the UK day-ahead baseload price rose to £75.95/MWh despite strong renewable forecasts for the coming days. France remained under focus due to warm weather forecasts, raising concerns about water availability for nuclear reactor cooling and the potential impact on supply reliability.
In the broader commodities market, Brent crude gained 2% over the weekend, reaching $77.01/bbl, as fears mounted over the consequences of a blocked Strait of Hormuz, which handles nearly 20% of the world’s oil and gas shipments. Coal prices also firmed, with the ARA CIF Cal-26 contract settling at $112.37/tonne, up 3.87% on the week, supported by continued heat-driven demand across Europe. In the carbon markets, EU Allowance (EUA) December 2025 contracts edged up to €72.97/tonne, despite a weekly decline of nearly 4%, as industrial activity expectations remain mixed amid energy uncertainty. The UK ETS contract fell slightly to £51.00/tonne.