UK Energy Market Update – Energy Prices Ease After June Spike - 1st July 2025

From panic to pause: prices ease as geopolitical tension cools. After a tense start to June, the UK wholesale energy market has entered a brief period of stability, but not without key lessons for businesses watching the markets closely.

Following a surge in prices driven by Middle East conflict fears, conditions have eased across gas and electricity markets as diplomatic signals and solid supply fundamentals brought calm.

Geopolitics: Fear Peaks, Then Recedes

In June, fears of conflict escalation between Israel and Iran triggered panic buying, especially due to the risk that the Strait of Hormuz, a vital route for around 20% of global LNG could be closed.

But those fears have since cooled:

• Qatar resumed LNG shipments through the Strait

• US-backed de-escalation talks provided reassurance to the market

• Trading sentiment shifted from panic to cautious optimism

Gas Market: From Spike to Softening

Gas prices retreated from recent highs of ~98p/therm to around 77–80p/therm by the end of June. Supporting factors included:

• Strong Norwegian pipeline flows keeping UK supply stable

• Active storage injections with surplus gas still flowing into reserves

• EU policy adjustments, including relaxed storage mandates, easing summer procurement pressure

Power Market: Stable Supply and Renewables Assist

Electricity prices also fell moderately from ~£89/MWh to the £75–80/MWh range thanks to:

• Increased wind generation

• Milder weather and cooling demand

• Stable grid conditions with no major outages

UK policy developments also played a role, with the government’s new 10-year Industrial Strategy promising long-term energy cost relief for over 7,000 high-use businesses.

Bright Edge View: A Short-Term Window Worth Acting On

The market is currently in a soft dip, but we know how quickly that can change.

The easing of geopolitical fears has provided temporary relief, but prices remain well above pre-crisis norms, and risks haven’t disappeared. Future supply issues, demand surges, or policy shifts could trigger another spike.

Now is the time to start asking the right questions.
If your business energy contract ends within the next 6–12 months, this could be a timely opportunity to explore fixed-term options before volatility returns.

Our Recommendation

We're encouraging our clients to act during this window. Start gathering your bills, review your contract end dates, and speak to us about securing forward contracts at today’s softened prices, with the flexibility to respond if markets shift again.

Let Bright Edge negotiate your business energy rates & see how much you could save

Contact us today to get started