What Sparked the Conflict?

Tensions between Israel and Iran have been simmering for years, rooted in geopolitical rivalry, nuclear ambitions, and regional influence. The latest escalation began with a series of drone and missile attacks, culminating in Israeli airstrikes on Iranian military and nuclear infrastructure.

Iran has responded with retaliatory strikes, and the situation remains volatile. The conflict is no longer confined to rhetoric—it’s disrupting critical energy infrastructure.

Why This Matters to the UK

Even though the UK doesn’t import much oil or gas directly from the Middle East, we operate in a global energy market. Prices here are shaped by:

• Global supply routes
• Futures trading
• Market risk sentiment

When conflict threatens key supply corridors or infrastructure, prices rise everywhere—including here.

What’s Happening to Prices?

• Oil prices have surged over 10% in the past week.
• Wholesale gas prices are climbing fast.
• Electricity prices are following suit.

This is not just about the Strait of Hormuz anymore.

New Risk: Eastern Mediterranean Gas Disruption

Israel’s offshore gas fields—Leviathan and Tamar—have halted operations due to security concerns. These fields supply gas to Egypt, which in turn exports LNG (liquefied natural gas) to Europe.

This disruption could:

• Reduce LNG volumes available to Europe
• Tighten the market
• Push up wholesale gas prices

And since 38% of the UK’s electricity is generated from natural gas (UK Government – BEIS), higher gas prices mean higher electricity prices.

Expect:

• 📈 Higher day-ahead and baseload power prices
• 📈 Increased fixed-term contract offers
• ⚡ More price volatility on flexible agreements

Could This Trigger Another Energy Crisis?

Not yet. We’re not facing the kind of systemic disruption we saw during Russia’s invasion of Ukraine. But markets are nervous. And nervous markets price in risk.

That means you’re already paying more, even if the gas is still flowing.

What Should UK Businesses Do?

1. Review Your Contracts
   Check when your current energy deal ends. If you’re on a flexible contract, monitor the market closely.
2. Prepare to Act Quickly
   Volatility means prices can spike without warning. Be ready to lock in rates if the market swings in your favour.

In Summary

• The Israel-Iran conflict has already pushed up oil and gas prices.
• Disruption in both the Gulf and the Mediterranean is affecting global supply confidence.
• UK electricity prices are rising in step with gas, and business energy tariffs are following suit.
• There’s no supply emergency yet, but the risk is priced in. And that price could climb higher.

 How We Can Help

At Next Gen Eco, we help businesses of all shapes and sizes navigate uncertain energy markets with experience and confidence. Whether you’re looking to fix your rates, explore green energy options, or simply understand your exposure—we’re here to help.

📩 Want to talk about your options? Get in touch today.