How will the Iran war affect UK energy prices?

Quick links:

• Natural gas prices
• The timeline (and why this will impact costs)
• Wholesale energy price changes so far
• What else could affect energy prices?
• How will One Utility Bill be affected?
• How this will impact One Utility Bill customers

First, let's look at the context of why gas prices in particular are key here.

In the UK we rely heavily on natural gas for heating and cooking at home, and many power stations burn gas to generate electricity. Most of the UK's gas is imported from Europe as liquefied natural gas (LNG) on huge boats, which is unloaded into our pipelines from the boat.

The UK energy industry, and your energy bills, are better protected from big sudden changes to the energy market. Lessons learned during the energy crisisbut prices are still likely to rise.

Natural gas from the Middle East

Countries around Iran, mainly Qatar, produce about 20% of the world's LNG supply. To export this around the world, LNG boats travel through the Strait of Hormuz, a narrow passage of water between the Gulf of Oman and the Persian Gulf. This passage is now is now essentially closed to all shipping traffic after warnings from Iran, and vessels choosing this route have since been attacked.

The UK relies less on liquid natural gas from Qatar than we did during the energy crisis a few years asgo, and most of our LNG supply now comes from the US. The global gas market is hugely interconnected, though, so any big changes impact wholesale gas costs, and therefore UK gas prices. Electricity prices are also likely to rise, because UK power stations use natural gas to generate electricity too.

Key developments on the Iran conflict timeline

On 28th February 2026, the United States and Israel launched joint missile strikes against Iran. Missile strikes sent by Iran in retaliation hit many countries across the Middle East. While the main focus globally is rightly the huge human consequences of this conflict, the international energy market has changed quickly. This region is a major source of the world's fossil fuels, so any disruption has a big impact on the prices we pay.

Here are the main points impacting UK bills and energy costs around the globe:

• US and Israeli strikes hit Iran on 28th February.
  • Retaliation from Iran hit states across the Arab Gulf, many of which are hugely important for global oil and gas production.
• A key LNG production site was hit by Iranian missiles. The site, belonging to Qatar's state-owned energy company, QatarEnergy, paused production as a result 
• Iran warns ships to avoid the Strait of Hormuz, a point on shipping routes for 20% of the world's oil and gas, just off the coast of the UAE and Oman.
  • Vessels taking the route through the Strait of Hormuz route have since been attacked.
  • At least 150 crude oil tankers and LNG vessels have dropped anchor in Gulf waters beyond the Strait of Hormuz, waiting for a safe route.

Wholesale gas price changes so far

Since 27th February, the day before the conflict, prices have changed dramatically. These figures are from 4th March, less than a week after it began, so these numbers are likely to change.

• April 2026 gas prices have increased 52% (78.6p/th to 119.5p/th)
• Winter 2026 gas contract prices rose 25% (80.7p/th to 101.0p/th)
• Figures correct as of 4/3/26
• Day Ahead Power Prices have risen 30% from £76.00/MWh to £99.25/MWh.
• This could be due to low wind power forecasts in the days ahead, but wholesale gas prices are another potential factor.

Gas storage levels

The gas supply in Great Britain and Europe is built up over the summer months to fuel the higher levels of gas consumption over colder winter months. At the time the conflict started, gas supplies across Europe and the UK are sitting around 30% and slightly increasing week on week. Suppliers are relying on regular deliveries of liquid gas to restock supplies over summer, which could be disrupted.

Overall only about 6.5% of the gas supply for Great Britain's energy network comes from Qatar. However, the price we pay is still likely to increase as other countries come to rely more on non-Qatari gas. Gas supplies were similarly hit at start of the Ukraine conflict. Much of Europe relied on natural gas pipelines from Russia, which became less reliable after the war began.

This is a fast-moving situation and the team is on alert for any changes that could impact our customers.

At the time of writing, we are no longer offering fixed price energy tariffs, and instead both 12-month fixed and rolling packages will be sold on the standard variable tariff. Energy prices could be unpredictable for some time. This means that the prices of energy from our energy partners could change at short notice.

Are we in a better position than the 2021-22 energy crisis?

Yes, things should be less extreme than a few years ago, but quoted prices could change more often, and predictions of future price cap changes could be more variable.

The UK energy regulator, Ofgem, introduced quarterly price cap reviews, and mandatory hedging rules during the last energy crisis.

What are energy supplier hedging rules?

Hedging is a method of buying energy in advance used by energy suppliers. In the 2021-2022 energy crisis, 30+ energy suppliers went out of business in the UK, and most hadn’t taken this approach. This left them without enough cash to buy energy at the hugely increased prices. Suppliers that had hedged their energy, generally speaking, stayed in business, and Ofgem has since introduced new financial resilience rules. All energy suppliers now have to meet specific 'capital targets', i.e. they need to have enough money to survive sudden changes in the energy market.

• If you’re an existing One Utility Bill customer:

• Your package won’t be impacted 👍
• The team will handle everything for you ✅

• When your package renews at the end of your contract:

• You’ll get an email with your new pricing, and email updates if that price changes 🆕

• If you have a One Utility Bill quote:

• You'll get email updates if your quoted price changes for any reason 👍