UK Energy Market Update: 16th - 20th March 2026
Week 3 of the Iran conflict. The week the supply disruption became structural. Kharg Island demolished. South Pars struck. Ras Laffan extensively damaged — 17% of Qatar's LNG confirmed offline for 3–5 years. Gas up 24% this week. Full conflict analysis →
The Week That Changed Everything — Gas Up 24%, Supply Damage Now Structural
Kharg Island demolished. South Pars struck. Ras Laffan extensively damaged — QatarEnergy confirmed 17% of LNG capacity offline for 3–5 years. NBP hit 175p intraday. Summer-winter spreads flipped to premium for 2026 and 2027. Cal-27 jumped 20% in a single session. The supply disruption is no longer temporary — it's structural.
💡 This was the week the crisis became structural. Until now, the assumption was: Hormuz reopens, Qatar restarts, prices fall back. That assumption is gone. QatarEnergy confirming 17% of LNG capacity offline for 3–5 years, Kharg Island demolished, South Pars struck, Kuwait refineries hit — the physical damage will take years to repair. Summer-winter spreads flipping to premium means the market no longer believes Europe can refill storage. Gas was up every single day this week.
📊 This Week vs Last Week
Gas rose every single day this week — from 122.47p on Monday to 152.42p on Friday. The acceleration was dramatic: the first three days added about 4p total, then Thursday and Friday alone added 26p as South Pars was struck and Ras Laffan damage was confirmed. This was the biggest weekly gain since the conflict began.
📈 How Prices Moved — 30-Day View
Sum-26 gas and power forwards — showing pre-conflict levels through to this week's close
What Happened This Week
The week began with the news that the US had struck Kharg Island over the weekend — the facility that handles 90% of Iran's crude exports. Trump said it was "totally demolished." Brent climbed to $105. On Tuesday, Israel killed Iran's security chief Ali Larijani and Basij commander Gholamreza Soleimani. Trump refused to negotiate with Iran. The EU formally refused to expand naval operations at Hormuz. Gas crept up steadily — 122p, 124p, 127p — but the real move was coming.
Thursday changed everything. Israel struck South Pars — the world's largest gas field, shared with Qatar. Iran retaliated by hitting Qatar's Ras Laffan Industrial City, causing "extensive damage" to the world's biggest LNG complex. Kuwait's Mina Abdullah refinery was hit by drone. Abu Dhabi shut its Habshan gas facilities. Gas spiked to 173p intraday (touching 175p). Brent surged above $115. In a single day, the conflict had directly targeted gas and LNG infrastructure across three countries.
Friday was worse. QatarEnergy confirmed that 17% of the country's LNG capacity would be offline for 3–5 years — damage to LNG trains and gas-to-liquids facilities far worse than initial reports. Sum-26 surged another 13.7% to 152.42p. The entire forward curve jumped 21–25% in the week. Summer-winter spreads flipped to premium for both 2026 and 2027. Cal-27 gas jumped 20% in a single session. Carbon rose to €68 on ETS reform talks.
The week closed with gas at 152.42p — up 24% from Monday's open and up 121% in 30 days. The market's assumption that Qatar could restart quickly after a ceasefire is gone. The supply damage is structural, and the forward curve is pricing it in years out, not months.
Key Days
US struck Iran's main crude export terminal over the weekend — handles 90% of crude exports. Trump said it was "totally demolished." Trump calling for a naval coalition (China, France, Japan, South Korea, UK) to escort ships through Hormuz. No country has publicly committed. Iran: "we never asked for a ceasefire." 3.2 million displaced in Iran.
Israel claims it killed security chief Ali Larijani and Basij commander Gholamreza Soleimani. Iran reached out to Trump's envoy to reopen talks — Trump refused. EU formally refused to expand naval operations at Hormuz. Israel told CNN it plans "thousands" of targets over the next three weeks. Death toll: 1,330+ in Iran (206 children), 886 in Lebanon.
Iran confirmed Larijani's death and vowed revenge. US dropped 5,000-lb bunker busters on Iranian missile sites along the Strait of Hormuz. UAE's Fujairah oil zone hit by drones — all UAE airspace temporarily closed. Senior US counterterror official Joe Kent resigned, saying "we started this war due to pressure from Israel." European gas storage at 28.9%, 6% below last year.
The biggest single-day infrastructure escalation. Israel struck South Pars — the world's largest gas field. Iran retaliated — Ras Laffan "extensively damaged." Kuwait's Mina Abdullah refinery hit by drone. Abu Dhabi shut Habshan gas facilities. Gas and LNG infrastructure across three countries now directly targeted. Trump warned further Iranian attacks on Qatar could trigger action against the entirety of South Pars.
Ras Laffan damage far worse than feared. QatarEnergy confirmed 17% of LNG capacity offline for 3–5 years. Summer-winter spreads flipped to premium for 2026 and 2027. Cal-27 jumped 20% in a single session. Carbon rose to €68. Power spot hit £137/MWh. The supply disruption is no longer temporary — it is structural.
🔍 What Moved the Market
Forward Prices — Where the Market Expects Prices to Go
Gas and power forward curves as at Friday 20 March close
The backwardation from last week has flattened significantly — near-term and longer-dated contracts are converging, which is a bearish signal for anyone hoping the crisis is short-lived. Cal-27 at 116.78p is still cheaper than current Sum-26, but it jumped 20% in a single session on Friday. The market is pricing structural supply damage into 2027 and beyond. Even Cal-28 and Cal-29 have risen sharply this month.
What This Means for Renewals
Gas up 121% in 30 days. QatarEnergy confirms 17% of LNG offline for 3–5 years. Summer-winter in premium. The supply damage is structural — this isn't going back to normal quickly. Suppliers are repricing in real time. If your contract is ending soon, get quotes now.
Get a benchmark quote so you have a reference point. Summer and winter 2026 contracts have converged — both around 150p. The forward curve is no longer offering much relief for later renewal dates. Knowing where you stand now means you can act quickly if a window opens.
Cal-27 at 116.78p is still cheaper than current rates but jumped 20% on Friday alone. The crisis is now being priced into 2027. If you were planning to wait for 2027 rates to settle, that window may be closing. Worth monitoring closely.
👀 What to Watch Next Week
The physical damage is now the story, not the fighting. Ras Laffan needs years of rebuilding. Kharg Island is offline. Kuwait refineries damaged. South Pars struck. Hormuz mined. Even a ceasefire cannot quickly reverse the structural supply damage. Markets remain highly sensitive to any further escalation — particularly any response to Trump's continued threats against South Pars.
Norwegian flows remain reduced ahead of April maintenance. European gas storage at around 29%, well below last year. Wind generation improving but cooler temperatures forecast. Carbon at €68 — EU reform talks could provide some offset but unlikely to reverse the gas-driven surge. We publish daily market reports tracking all of this — link below.
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