Energy Market Update 05/05/2026

Welcome to our weekly energy market update, where we share the latest trends, shifts, and key developments impacting the energy sector. Whether it’s fluctuations in oil and gas prices, changes in renewable energy policies, or updates on energy infrastructure projects, we’re here to help you stay informed. Join us as we break down the most important factors influencing the market this week and explore what these changes could mean for your business.

Current Market Drivers:

📉 EU gas demand is expected to fall by 2.5% in 2026 as persistently high prices and stronger renewable output continue to suppress consumption, creating a softer demand backdrop. However, storage refilling needs and tighter LNG availability help limit downside.

🏦 The Bank of England is expected to keep rates at 3.75% as Iran’s war-driven energy inflation clouds the growth outlook. Softer business and consumer confidence could weigh on UK energy demand and add to broader macroeconomic uncertainty.

⚠️ Deadlock in US-Iran negotiations, alongside Trump’s plans for a prolonged Strait of Hormuz blockade, points to a high possibility of re-escalation and continued supply disruption, reinforcing expectations of sustained tightness in global oil and LNG markets.

🌡️ Chinese LNG re-exports have fallen amid warmer regional weather, tightening market conditions. This could worsen over the summer if El Niño develops, adding further strain to global energy markets as LNG competition intensifies.

⚡ Aurora Energy warned British winter power prices could rise by as much as 85% to around £160/MWh if disruption in the Strait of Hormuz persists, highlighting the continued sensitivity of UK and European energy markets to global gas market disruption.

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