Update (20 Apr): The conflict that reshaped Q1 continues. Iran reclosed the Strait of Hormuz this weekend; US seized an Iranian vessel Sunday. For live pricing see today's daily report. Full conflict analysis →
The quarter front-month gas doubled
Q1 2026 covered more ground than most years. January brought winter demand and gas broke above 80p again. February delivered the calm before the storm — gas and power fell on mild weather and US-Iran talks. Then on 28 February, Operation Epic Fury closed the Strait of Hormuz, damaged Ras Laffan for years, and reshaped the forward curve out to 2029. Gas ended the quarter up 101%, power up 40%, and every contract on the curve materially higher.
Front-month gas rose from 68.22p at the January open to 137.13p at the March close — a 101% gain driven almost entirely by the final month. January added winter premium (+22.6%), February gave some back on mild weather and diplomacy (-6.9%), then Operation Epic Fury sent Sum-26 gas up 79% in March alone. The whole forward curve lifted — Cal-27 up 61% in March, Cal-28 up 33%, Cal-29 up 18%. Structural damage to Ras Laffan (17% offline for 3–5 years) means the quarterly move isn't going to fully unwind.
Power ended Q1 up 40%, significantly less than gas. January rose 10% on winter demand. February fell 12% as mild weather and collapsing EU carbon prices brought relief. Then March delivered a 48% surge as the conflict pushed gas, oil and carbon together. Sum-26 power closed the quarter at £102.44 — still well above pre-conflict £69.37. Carbon markets and the 2028 removal of UK Carbon Price Support continue to support power more than gas in the forward curve.
Q1 in Three Acts
January set the winter tone. February hinted at relief. March rewrote the rulebook.
Opened at 68.22p gas, drifted to a low of 64.52p by 6 Jan, then reversed sharply. On 16 Jan colder weather forecasts triggered a 12.8% single-day jump in gas — the biggest move of the month. The final trading day added another 5.6% to close at 83.67p, breaking back above the psychological 80p barrier. Winter wasn't finished.
The feared deep freeze never arrived. Temperatures ran 7–8°C above seasonal averages with strong wind generation cutting gas demand. US-Iran talks in Oman then Geneva calmed supply-disruption fears through mid-month. A late-month bounce as talks stalled took gas to 80.77p briefly, but the underlying move was down. Gas -6.9%, power -11.9% — a window that closed on 28 Feb.
Operation Epic Fury (28 Feb) — US-Israel strikes across Iran. Hormuz closed. Ayatollah Khamenei killed. QatarEnergy halted LNG. Sum-26 gas hit 158.80p on 23 Mar. Ras Laffan struck — 17% of global LNG offline for 3–5 years. Cal-27 up 61%. Week 4 saw the first sell-off as markets absorbed the new baseline. Q1 closed at 137.13p — up 79% in a single month.
"Operation Epic Fury" — the moment Q1 changed
Saturday 28 February. US-Israel forces launched coordinated strikes across 24 of Iran's 31 provinces. Within hours the Strait of Hormuz — through which 20% of global LNG flows — was closed. Ayatollah Khamenei was confirmed killed in the initial wave. QatarEnergy halted LNG exports and by Day 9 had declared force majeure.
The market reaction was immediate and total. TTF doubled overnight. UK Sum-26 gas jumped from 76.70p to above 131p in the first nine days. By 19 March, Iran's retaliatory strike on Ras Laffan had taken 17% of Qatar's LNG capacity offline for 3–5 years — damage that no ceasefire can reverse. The IEA called it "the largest supply disruption in history."
Every major contract on the forward curve repriced: Sum-26 gas +79%, Win-26 +73%, Cal-27 +61%, Cal-28 +33%, Cal-29 +18%. The geopolitical risk premium that markets had slowly been pricing out through 2024 and 2025 came roaring back — this time with permanent physical damage attached.
Gas Price Arc — Q1 2026
Front-month / near-term gas across 63 trading days. Cal-26 through February, rolling to Sum-26 on 1 April.
How the Curve Lifted
Every contract on the forward curve repriced in Q1. The whole structure shifted — not just near-term.
| Contract | Pre-Q1 (Dec close) | Q1 Close (31 Mar) | Q1 Move |
|---|---|---|---|
| Sum-26 | ~77 | 137.13 | +78% |
| Win-26/27 | ~81 | 140.41 | +73% |
| Cal-27 | ~69 | 111.13 | +61% |
| Cal-28 | ~60 | 79.41 | +33% |
| Cal-29 | ~57 | 67.11 | +18% |
| Contract | Pre-Q1 (Dec close) | Q1 Close (31 Mar) | Q1 Move |
|---|---|---|---|
| Sum-26 | ~£70 | £102.44 | +46% |
| Win-26/27 | ~£78 | £106.33 | +36% |
| Cal-27 | ~£67 | £88.36 | +32% |
| Cal-28 | ~£62 | £71.48 | +15% |
| Cal-29 | ~£61 | £67.88 | +11% |
The Seasonal Discount Collapsed
Normally summer gas trades well below winter. Not this quarter.
What Q1 Taught Us
What This Means for Your Renewal
Based on where Q1 closed and the structural outlook for the rest of 2026.
You're in the hardest window. Near-term contracts took the brunt of March's repricing — May-26 gas at 138.46p is up 78% from pre-conflict levels. But the daily market since early April has seen substantial falls (gas -27% over 30 days at Friday's close) as the ceasefire/talks dynamic plays out. Today's weekend escalation is bouncing prices back up. The honest position: get quotes today to benchmark, but be aware rates are moving day-to-day on the Pakistan talks outcome. Your OOC exposure is highest here — moving to any fixed deal protects you from further volatility.
The seasonal discount has collapsed — summer 2026 gas is barely cheaper than winter 2026/27 (2%). The refill challenge (Europe at 28% storage, needs 80% by November) will dominate pricing through summer. Win-26/27 at 140.41p is up 73% from pre-Q1. How quickly Ukraine/Iran developments de-escalate matters, but the structural pressure (Ras Laffan, storage) doesn't go away. Worth getting quotes now as a benchmark, then following the daily reports for a clearer entry signal.
Winter 2026/27 carries the biggest structural premium in the curve. Cal-27 at 111.13p is up 61%. If storage injection goes well through summer there could be a window later. If it doesn't, winter gets more expensive as the year progresses. This window has the most two-way risk of any renewal period — benchmark early, set a target rate, and be ready to act if either the supply or diplomatic picture clarifies.
Longer-dated contracts have risen but proportionally less — Cal-28 up 33%, Cal-29 up 18%. There's still a path back to something closer to pre-conflict levels if Ras Laffan rebuilds and Hormuz normalises. Less urgency here but worth watching: if near-term contracts start to meaningfully unwind, longer-dated contracts typically fall further. Set a target and benchmark periodically.
Q2 2026 Outlook
What we're watching now that April is underway.
The Q1 Bottom Line
Q1 2026 delivered the most dramatic quarterly move in UK energy since 2022. Gas roughly doubled. Power rose 40%. Every contract on the forward curve — from next month out to 2029 — moved materially higher. The month of March alone accounted for most of it: Operation Epic Fury on 28 February triggered the largest supply disruption the IEA has ever recorded.
The lesson from Q1 isn't a trading lesson — it's a structural one. Physical damage doesn't reverse with diplomacy. Ras Laffan is offline for 3–5 years. The 17% of Qatar's LNG capacity lost in March is now a permanent feature of every forward curve. Even if Hormuz reopens fully and talks produce a ceasefire, prices can't fully return to pre-conflict levels because the supply base has shrunk.
For renewals, this changes the framework. The seasonal discount has collapsed. The summer-winter spread is 2% instead of the usual 15%. Near-term contracts are volatile on talks outcomes. Longer-dated contracts (Cal-28, Cal-29) carry less near-term volatility but have absorbed the structural premium. Set a target, benchmark regularly, and be ready to act — this quarter showed that good prices don't wait around, and bad ones can arrive overnight.
Volatile Market —
Know Where You Stand
Q1 2026 reshaped the forward curve. Whether you're renewing in 3 months or 3 years, getting a benchmark quote today is the starting point for any sensible procurement decision.
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Source: ICE Endex / SEFE daily reports · UK NBP gas · UK Power Base
Smart Energy Company — Independent energy broker since 2014
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