Gas Market
UK gas prices were dominated by weekend news that a memorandum of understanding had been agreed between the United States and Iran, with the deal expected to be formally signed on Friday, 19 June, in Geneva. The front-month July contract opened at 105.69p/th, down 6.22p, while the Winter-26 contract opened at 111.25p/th, 6.24p below last Friday’s settlement. For much of the session, prices traded close to their opening levels as the market cautiously assessed the implications of the agreement ahead of its formal signing later in the week. However, reports that an LNG tanker had successfully navigated the Strait of Hormuz with fewer difficulties than on previous voyages boosted confidence that the waterway could fully reopen in the coming days. As a result, the July contract fell towards the 100p/th level, settling at 101.01p/th and briefly trading marginally below 100p/th post settlement. Further downside may emerge once the Strait is officially declared open and Qatar resumes operations at its natural gas liquefaction facilities.
Power Market
GB baseload power prices fell a further 5%, extending losses to around 10% since last Thursday, as developments in the Middle East continued to weigh on European energy markets. The move broadly tracked weakness in the NBP gas market, with the Winter-26 baseload contract settling below £100/MWh for the first time in over a month as expectations of improved LNG flows pressured the curve lower. Limiting downside, however, was a firmer UKA market, which rose 3.6% on the session as improving macro sentiment linked to the U.S.–Iran agreement supported UK carbon demand expectations.
Likewise, European carbon allowances were supported by the Middle East deal, as improving economic sentiment lifted emissions demand expectations. Additional support came from approval of revised free allocation benchmarks, which helped reduce regulatory uncertainty.
Oil Market
The front month Brent crude oil contract fell to $83.17/bbl on Monday, its lowest settlement since early March, after the United States and Iran agreed a memorandum of understanding aimed at ending the conflict and reopening the Strait of Hormuz. The move prompted traders to unwind a significant portion of the geopolitical risk premium that had built up during months of supply disruption. Market participants are increasingly focused on the prospect of lost Middle Eastern barrels gradually returning to global markets, with forecasts for oil prices revised lower as trade flows normalize. While uncertainty remains around the pace of production restarts, shipping availability and export recovery across the region, expectations of improving supply have weighed on prices despite historically low inventories and the potential for longer-term support from strategic stockpile replenishment.
Markets This Morning
NBP gas prices are holding broadly steady following Monday’s decline, as the market awaits further clarity on maritime traffic through the Strait of Hormuz and the potential resumption of LNG production in Qatar. The front-month July contract last traded at 101.02p/th, in line with Monday’s settlement, as participants remain cautious ahead of any formal confirmation of easing transit conditions. Crude oil has meanwhile slipped to a fresh three-month low, with prices continuing to come under pressure on expectations of rising supply as seaborne flows through the Strait normalise. Additional downside has been driven by concerns over weakening global demand, at a time when the market is anticipating a marked increase in available barrels in the weeks ahead.
