Gas Market
Geopolitical uncertainty continued to influence gas markets on Monday, as traders closely monitored Iran’s potential response to U.S. strikes and the risk of a blockade of the Strait of Hormuz. The NBP front-month contract spiked to an intra-day high of 99.45p/th amid heightened tensions but later eased, settling down 0.73p at 95.46p/th. The Winter-25 contract also rallied early in the session to reach 110p/th, its highest level since March, before retreating to close at 107.83p/th, down 1.49p on the day. While over 87% of Qatari LNG exports are destined for Asia, any disruption to the Strait of Hormuz would have significant implications for both Asian and European gas markets, given Europe’s reliance on LNG cargoes. On the prompt, the NBP Day-Ahead price fell by 2% to 94.8p/th, tracking declines on the forward curve and stable UK system fundamentals.
Power Market
GB baseload power mirrored movements in the gas market on Monday, with most contracts finishing the day lower. The front-month contract declined by £0.95 to settle at £81.00/MWh, reflecting bearish sentiment across the energy complex. On the prompt, however, the Day-Ahead price rose 19% to £52.00/MWh, driven by a forecast drop in wind generation for the remainder of the week.
In contrast, European carbon prices firmed slightly, diverging from the downward trend in gas and power. The Dec-25 EUA contract rose by €0.39 to €73.44/tonne as the market awaited further developments following U.S. airstrikes in the Middle East.
Oil Market
Oil prices fell sharply on Monday, dropping more than 7% and losing over $5 per barrel, after Iran refrained from disrupting oil and gas tanker traffic through the Strait of Hormuz. Instead, it launched an attack on a U.S. military base in Qatar in retaliation for recent U.S. strikes on its nuclear facilities. Front-month Brent crude closed down $5.53, or 7.2%, at $71.48 per barrel, its steepest single-day decline since August 2022. Prices were up 5.7% earlier in the session, with prices supported by fears that Iran would follow through on threats to attack the Strait of Hormuz, a critical shipping route for oil exports from Saudi Arabia and the UAE. Reports late Monday night of a ceasefire agreement between Israel and Iran have contributed to further losses on Tuesday, with Brent crude down another $1.64 to $69.82 per barrel.
Markets this morning
Energy markets reacted sharply to overnight news that Iran, Israel, and the U.S. have brokered a ceasefire agreement, with prices falling more than 11%. NBP near-curve contracts are down an average of 10.70p/th, unwinding much of the risk premium built into gas prices following last week’s exchange of strikes between Israel and Iran. Brent crude has dropped a further $2.30/bbl, extending the significant losses seen late in yesterday’s session. While Israel has since reported fresh missile fire from Iran despite the ceasefire, limiting further downside, the declines seen this morning reflect market relief over the apparent de-escalation and reduced risk to shipping through the Strait of Hormuz.
24 June 2025
