UK Gas Prices Hit 2023 High on Hormuz Supply Fears

UK natural gas prices climbed as high as 184 pence per therm on Wednesday, their highest level since January 2023, as traders assessed the latest US-Iran attacks, with growing uncertainty over traffic through the Strait of Hormuz heightening supply concerns and weighing on sentiment. The US said it had launched overnight airstrikes on targets in Iran, prompting retaliation from Tehran in the most serious escalation between the two countries in weeks. Iran’s Islamic Revolutionary Guard Corps warned that the strikes would further restrict traffic through the Strait of Hormuz, a key energy route carrying roughly a fifth of global LNG. Gas prices rose despite expectations of weaker demand, as strong wind power generation reduces the need for gas-fired electricity.

UK natural gas prices climbed above 180 pence a therm on Wednesday, the highest level since January 2023, as rising hostilities between the US and Iran heightened fears of a prolonged disruption to LNG supplies from the Persian Gulf. Iran struck back at US military bases in Jordan, Kuwait and Bahrain following the latest US attacks on Iranian targets near the Strait of Hormuz, which President Trump said were in response to Iranian mine-laying attempts in the waterway and an earlier attack on a US base in Jordan. The escalation comes as LNG flows through the strait were almost at a standstill, tightening supplies and forcing European buyers to compete more aggressively for alternative cargoes as they prepare for the winter heating season. With European gas storage levels still below their usual seasonal levels, an extended disruption would leave the region more exposed to sharper price volatility once colder weather arrives.

UK Gas increased to 180.11 GBp/thm, the highest since January 2023. Over the past 4 weeks, Natural Gas UK gained 27.34%, and in the last 12 months, it increased 130.19%.