Middle East Conflict Updates

Update – 17.04.2026

Iran’s foreign minister Abbas Araghchi has announced that “passage for all commercial vessels through the Strait of Hormuz is declared completely open for the remaining period of ceasefire.” The passage of vessels will be coordinated route announced by the Ports and Maritime Organisation of Iran previously. US President Trump has posted his thanks with the message; “IRAN HAS JUST ANNOUNCED THAT THE STRAIT OF IRAN IS FULLY OPEN AND READY FOR FULL PASSAGE. THANK YOU!” on his TruthSocial app.

This is a big development that shows softening of the stance held by Iran in terms of restricting oil, LNG, LPG and other chemical and fertiliser cargoes from leaving the Gulf region and could be signs that an agreement on ending the war is closer. The Israel and Lebanon 10 day ceasefire was agreed yesterday, meaning that two of the large sticking points in US-Iran negotiations are now cleared in terms of moving forwards to agreeing terms to end the conflict. There is still formal discussions to be had but this is certainly a positive step.

Update – 13.04.2026

Markets were dominated by extreme geopolitical volatility last week as tensions between the United States, Iran and Israel repeatedly escalated and de‑escalated around control of the Strait of Hormuz, driving sharp swings in energy prices and risk sentiment. Early in the week, markets weakened as hostilities persisted and Iran rejected multiple U.S.‑backed ceasefire proposals, conditioning any settlement on sanctions relief, reconstruction funding, and sovereign control over transit protocols in the Strait. The situation deteriorated further after Iranian authorities halted Qatari LNG carriers attempting to transit Hormuz, highlighting immediate supply risks.

President Trump’s increasingly aggressive rhetoric and deadline‑driven ultimatums added to uncertainty, while a diluted UN Security Council resolution failed to reassure markets. Midweek, risk premiums surged as the U.S. issued an ultimatum for Iran to reopen the Strait, threatening strikes on critical infrastructure. Structural tightness in global gas and LNG markets amplified the reaction: European storage levels remain near 28%, U.S. LNG utilisation is near capacity, Australian flexibility is constrained by the extended Wheatstone outage, and Asia continues to outbid Europe for marginal cargoes. Despite soft spring demand, markets increasingly questioned whether summer supply risks were being underpriced.

A sharp reversal followed President Trump’s announcement of a two‑week conditional ceasefire, explicitly tied to reopening Hormuz. This triggered one of the largest single‑day unwindings of geopolitical risk premium on record, with crude prices falling 13–16%. However, the relief proved fragile. Iranian strikes on Saudi energy infrastructure, continued restrictions on shipping permits, and conflicting statements from all parties quickly undermined confidence in the ceasefire’s durability. Vessel traffic through Hormuz remained below 10% of normal volumes, leaving hundreds of oil and LNG carriers stranded inside the Gulf. On Monday, markets gained value as peace talks collapsed over the weekend. Oil rebounded above $100/bbl following the announcement of a U.S. blockade on Iranian ports and the threat of counter‑blockades. Although U.S. naval mine‑clearing activity suggested limited progress toward reopening shipping lanes, uncertainty around regional escalation remained elevated. Forward curves flattened, further weakening storage economics and liquidity across European hubs.

From a UK gas perspective, fundamentals are largely overshadowed by geopolitics. Unseasonably warm weather kept LDZ demand subdued for much of the week, leaving the system generally long and enabling injections, despite fluctuating Norwegian imports. Toward the end of the period, falling temperatures lifted LDZ demand and tightened balances temporarily, but rising wind generation is expected to restore injections. Norwegian exports peaked at record April levels early in the week before easing as Troll maintenance (~15 mcm/d) became the primary outage.

Update – 16.03.2026

The Iran war has now entered a more entrenched and structurally volatile phase. Qatar LNG has now been shutdown for 12 days with weeks to months recovery time, whilst the Strait of Hormuz remains extremely risky for global shipping as 16 vessels have been hit during the conflict. The Iranian regime has shown signs of stability, despite continued US and Israeli strikes. Increasingly contradictory US political messaging and Trump’s urging for NATO involvement provides mixed signals for energy trading.

Brent crude oil remains close to $100/bbl. with gas and electricity prices trading in a narrower range since last Thursday in a rare pause in headline risk.  We expect this to be a short lived period and continue to advise customers on meeting their strategic risk objectives.

Our key things to watch out for are;

• A credible start of naval escorts for cargoes via the Strait of Hormuz
• The restart of Qatari LNG
• AIS shipping signals increasing- more shipping traffic returning towards normal
• Clarity of US strategic aims
• Any overlap of planned Norwegian gas maintenance and middle east LNG disruption.

We understand you may have questions or concerns. Contact us at info@consultus.com to discuss how we can support your organisation.

Update – 10.03.2026

Prices so far this morning look to be moving circa 8-15% lower following comments from Trump suggesting the war will end “very soon”, however are showing some signs of resilience as we move further into the day and look to be reducing the losses posted at the start of trading today. In effect this will bring prices back down towards Friday’s level if they hold.

There remains lots of uncertainty still, the G7 meeting yesterday failed to agree to release oil barrels from the strategic reserves but have committed to action against the price surges we’ve seen in energy. It is also thought that the US is considering temporarily easing sanctions against Russia to help increase oil exports, all of which remains to be seen but has helped to stem the uptick in pricing today.

Update – 09.03.2026

The conflict has entered a more entrenched and structurally uncertain phase, driven by Iran’s closure of the Strait of Hormuz, continued U.S./Israeli strike activity, and shifting strategic messaging from Washington.

The risk premium remains concentrated in the prompt and front two seasons but is spreading to 2027 products due to concerns over Europe’s refilling efforts this summer, with NBP/TTF volatility driven by evolving expectations around LNG rerouting, Qatari outages, and tanker immobilisation in the Gulf.

Leadership transition in Iran has had an initial bullish impact on markets, with the selection of Mojtaba Khamenei as new supreme leader reducing the probability of a near-term internal collapse and that Iranian regime appears resolute to hold in place. This has pushed Brent crude oil prices above $100/bbl. for the first time since 2022 as of AM on 9th March.

1. Strategic and Political Update

1.1 Iran’s Position Strengthens Despite Heavy Losses

Iran’s leadership transition progressed with notable speed before Sunday’s selection of Mojtaba Khamenei as new supreme leader, the son of Ayatollah Ali Khamenei. The interim leadership council had consolidated command authority over the IRGC, Artesh, and regional militia networks which will now be under control of Khamenei.

Implication: Tehran is not signalling fragmentation; the rapid institutional response suggests continuity of state decision-making, reducing odds of Scenario A (Managed De-escalation).

1.2 The U.S. Moves Toward an Open-Ended Posture

U.S. messaging has shifted sharply.

• Initial discussions indicating a 4–5-week timeframe have been replaced by statements that the conflict could last “forever.”
• Secretary Hegseth’s comment (“we’re just getting started”) strengthens the perception that Washington is shifting into Robert Pape’s Stage 3: Emerging Long War.

Implication: The U.S. has not defined an achievable end state—deepening the “Smart Bomb Trap.” Precision strikes have escalated nationalist sentiment within Iran, and Tehran, not Washington, is now setting escalation tempo.

1.3 Strait of Hormuz: Now a Fully Realised Chokepoint Event

Iran’s closure of the Strait and the missile impact on tankers represent the closest the global
system has come to a true maritime energy crisis since the 1980–88 Tanker War.

• Roughly 20–22% of global LNG and 20–27% of crude/petroleum flows remain
  effectively immobilised.
• Several thousand vessels are stranded inside/outside the Gulf.

Implication: Even if escorts begin within days, AIS congestion, insurance repricing, and long-haul LNG rerouting ensure lasting dislocation well beyond the resolution of this conflict phase.

2. Military Trajectory & Escalation Dynamics

2.1 Battlefield and Strategic Drivers (Week of 28 Feb – 06 Mar)

• New cross-border strikes between Israel and Iran, including Iranian attacks on Gulf
  energy infrastructure.
• U.S. tanker hit—first direct commercial casualty for an American vessel in this war.
• Qatar LNG production suspended, North Field offline. Force majeure declared 4 March.
• Egyptian gas imports from Israel halted due to Leviathan shutdown.
• U.S. considering escorted convoys and deploying political-risk backstops via DFC.

Assessment: The conflict has moved from a “punctuated confrontation” to a semi-sustained regional conflict with direct impacts on energy infrastructure and shipping.

• Iran continues to dictate escalation thresholds, leveraging the Strait closure as a political and economic weapon.
• U.S./Israeli strikes have intensified but have not reduced Iran’s operational capacity.

Probability shifts (vs. previous week):

• Scenario A – Managed De-Escalation: ↓ from 10–20% → 5–10%
• Scenario B – Contained but Prolonged Tensions: ↑ from 30–40% → 40–50%
• Scenario C – Regional Escalation / Infrastructure Strikes: remains elevated at 40–50%

3. Energy Market Implications (UK & EU Focus)

3.1 Gas & LNG
Immediate Market Behaviour

• NBP/TTF prompt and front seasonal contracts surged 50-90% earlier in the week, but volatility has since moderated.
• European prices must remain above Asia to secure U.S. cargoes, as Asian LNG now trades at a premium for May.
• U.S. LNG diversions toward Asia have begun, tightening the Atlantic Basin outlook for summer.

Key supply disruptions

• Qatar:
  • Full/partial shutdown across major LNG production sites.
  • Force majeure declarations.
• LNG tankers immobilised around Hormuz; risk of further damage remains high.

Europe’s Structural Challenge

Europe requires ~700 LNG cargoes (≈67 bcm) to refill storage to target levels by October. Qatari outages and U.S. diversions threaten the ability to meet these injection needs without:

• sustained price elevation,
• increased reliance on Norwegian/Algerian flows,
• possible summer demand destruction.

3.2 UK Power Markets

Gas remains the marginal fuel—power prices follow gas volatility.

• Wind output variability has sharpened day-ahead price risk.
• Prompt and Summer-26 products show the strongest price sensitivity.
• Far-curve (2027–28) continues to trade at a discount, consistent with markets viewing the conflict as a transitory but severe shock, not a structural break.

3.3 European Power Markets

European power markets remain closely tied to gas‑for‑power dynamics, with volatility in TTF feeding directly into day‑ahead and near‑curve pricing across core continental hubs.

During week 10, there were only small changes compared to last week. LDZ demand was flat week-on-week, while non-LDZ demand was recorded 100GWh/d lower, driven by lower gas for power demand in Germany and the Netherlands.

• Gas remains the marginal driver in many markets, particularly Germany, Italy, and parts of Central Eastern Europe, leaving power prices highly sensitive to short‑term gas repricing.
• In Germany and Netherlands, there is still some fuel-switching capacity left, and, due to the higher gas prices, the stack now favours coal and lignite generation.
• Renewables variability, especially in wind‑dependent markets such as Germany, France, and Denmark, has amplified intraday and day‑ahead volatility. Periods of low wind output continue to expose system tightness and heighten the responsiveness of power prices to gas movements.
• Prompt and Cal-26 power contracts exhibit the strongest price sensitivity, reflecting the combination of geopolitical headline risk, uncertainty around LNG availability, and upcoming maintenance on key Norwegian gas assets.
• Similar to the UK: The far curve (2027–28) continues to trade at a discount to historical averages, signalling market confidence that the current energy shock—while severe—is not yet expected to trigger a structural repricing of long‑term European power fundamentals.

This structure remains consistent with a market viewing the conflict as an acute but potentially temporary disruption rather than a shift in long‑run generation economics.

4. Updated Scenario Framework (Next 2–6 Weeks)

A. Managed De-Escalation (Unlikely; 5–10%)

Would require:

• U.S. willingness to halt strikes despite not achieving declared political objectives.

Energy Outlook: Brief risk-premium compression; but shipping bottlenecks would persist for weeks.

B. Contained but Prolonged Conflict (Base Case; 40–50%)

Slow-burn conflict characterised by:

• periodic strikes,
• ongoing tanker escorts,
• convoy suspensions,
• significant insurance repricing.

Energy Outlook:

• Persistent volatility in prompt.
• LNG rerouting toward Europe/Asia determines market tightness.
• European storage refill becomes increasingly challenging.

C. Regional Escalation / Infrastructure Degradation (High-Impact Tail; 40–50%)

Triggers include:

• successful strikes on LNG liquefaction trains,
• refinery hits in Saudi/UAE,
• missile incidents involving U.S. naval assets.

Energy Outlook:

• Step-change in oil and gas prices.
• LNG rationing possible in extreme scenarios.
• Europe forced into demand-curtailment planning.

5. Monitoring Dashboard (Updated)

Signals That Would Shift Our View

• Harmonised U.S.–Gulf maritime security guarantees + confirmed tanker escorts operating safely.
• Qatar LNG recovery timeline: credible announcements on damage assessment and repair.
• AIS data showing vessel movement through Hormuz resuming.
• U.S. strategic clarity on objectives (currently absent).

6. Outlook: Are We Now Entering Pape’s Long War?

One week into the post-Hormuz-closure phase, the indicators increasingly align with Robert Pape’s, a professor at the University of Chicago, Stage 3 — the Long War:

• Precision strikes have failed to coerce political change.
• Iran has demonstrated resilience, cohesion, and the ability to escalate horizontally and vertically.
• The U.S. has now signalled open-ended commitment without articulating a viable end state.

Update – 03.03.2026

Short term European gas markets have risen to the highest point since January 2023, nearly doubling since Friday’s close as a result of the escalations in the Middle East. Electricity prices have also seen sharp increases, with markets rising by over 50% during the same period.

Volatility in pricing is due to halting of LNG and oil exports via the Strait of Hormuz and intensifying attacks on energy infrastructure in Iran’s neighbouring countries. Markets are pricing in risk premium, with more than 20% of global LNG supply currently paused with an uncertain duration, adding challenges to Europe’s ability to meet demand should the conflict become prolonged.

At this stage, it’s not clear whether this conflict will be short-term or develop into something longer lasting. However, it should be expected that, for now:

• Prices are likely to remain spiky and at higher levels
• Availability of prices and contracting will be reduced.
• That bid/offer spreads (the difference between the price to buy and the price to sell) are expected to become larger.

At times like these it’s always important to have a structured and clear purchasing strategy and to avoid reactive decision making that could expose organisations to additional risk. As your energy partner, Consultus are advocates of solid, data driven decision making and offer expert guidance to customers during the most challenging of situations. If you have questions, concerns or want to know how we can assist you please get in touch and we’ll be happy to help.

Update – 02.03.2026

• The conflict is widening across the Middle East, with cross-border strikes and activity by Iran-aligned groups raising the risk of further escalation and energy-market disruption. The Strait of Hormuz—through which a significant share of global oil and LNG trade transits—remains the pivotal chokepoint for near-term price and supply risk.
• Baseline view: Iranian leadership changes—or the regime shifts sufficiently to halt hostilities within 1–2 weeks—or the U.S. chooses to de-escalate over the same timeframe after perceiving setbacks to Iran’s missile and nuclear programs.

The current escalation between the United States, Israel, and Iran is rooted in long‑standing concerns over Iran’s nuclear ambitions and its expanding regional influence through proxy groups. Washington and Tel Aviv have argued that Iran’s nuclear program was accelerating, prompting coordinated Israeli and U.S. strikes in June 2025 on key facilities at Natanz, Fordow, and Isfahan after Israel initiated major air operations. Although U.S. and Israeli leadership publicly claimed the attacks had significantly set back Iran’s nuclear capabilities, intelligence assessments indicated only a temporary delay. Iran acknowledged severe damage but maintained that it would not abandon its uranium‑enrichment program.

At the same time, Iran’s support for Hezbollah, Hamas, the Houthis, and other regional militias continued to fuel tensions and contributed directly to the rapid escalation of conflict. The 12‑day confrontation in June 2025—marked by Iranian missile and drone attacks on Israeli cities and subsequent U.S. involvement—ended with a U.S.‑brokered ceasefire, but the underlying drivers remained unresolved.

Diplomatic efforts resumed intermittently: Iran agreed to re‑enter talks with the U.K., France, and Germany later in 2025 despite the threat of renewed sanctions. However, Tehran simultaneously signalled a harder line by insisting on preserving its enrichment capabilities and restricting access for nuclear inspectors. This combination of military confrontation, limited diplomatic progress, and persistent nuclear and regional ambitions continues to justify U.S. and Israeli concerns and underscores the fragility of the security environment surrounding Iran.

Israel conducted strikes on Iran following explosions across Tehran, including in areas associated with Supreme Leader Ayatollah Ali Khamenei. The United States initiated parallel operations, with President Trump describing the campaign as a response to both nuclear-related threats and longstanding grievances dating back to the 1979 revolution. Iran and its allied militias retaliated with missile strikes across Israel and several Arab states, while Israel expanded its operations to include targeted attacks on Hezbollah-controlled districts in southern Beirut.

• Widening conflict footprint: Strikes and counterstrike’s now involve multiple fronts (e.g., Israel–Hezbollah theatre), heightening the probability of miscalculation and spillover into additional geographies. (Monitoring item; high uncertainty.)
• Strait of Hormuz: Roughly 20–27% of global oil/petroleum maritime trade and ~20–22% of global LNG typically transit the Strait; any protracted disruption elevates price and supply risk.
• Market sensitivity: Even partial or temporary disruptions at this chokepoint can amplify energy-price volatility; full closures—considered low probability but high impact—carry double-digit oil price spike risk in stress scenarios.
• Oil and LNG production in the Middle East: Qatar halted production of liquefied natural gas on Monday and Saudi Arabia shut its biggest domestic oil refinery after a drone strike.

Transmission Into UK and EU Gas and Power

Markets are acknowledging the seriousness of the conflict, but are also signaling that, for now, this is a geopolitical shock, not a systemic crisis.

In this environment, prompt TTF and NBP contracts typically lead price moves. Volatility increases first in day ahead and seasonal contracts. Power markets then inherit this volatility, particularly in the UK where gas remains the marginal fuel in many settlement periods.

The linkage is most visible under tighter system conditions, including lower wind output, constrained margins, or unplanned supply outages. Absent sustained gas scarcity further dated power contracts tend to remain comparatively stable.

Update – 01.03.2026

• We expect a large degree of volatility and increased energy pricing upon the market opening on Monday. The first few hours of trading on Monday 2^nd March will be critical in determining whether energy remains in a temporary risk spike or enters a sustained supply-driven rally.
• Oil prices suggest increases of 10% on Sunday alone and could spike as high as $100 per barrel, a further 20% from current prices according to several analysts. We expect the increase for natural gas and electricity markets to be less severe but there is a correlation meaning that we expect potential increases of circa 10-20% for natural gas and electricity markets depending on how prolonged the conflict and disruption lasts. Approximately 20% of global oil supply traverses the Strait of Hormuz, which will have a knock-on impact to electricity and gas.
• LNG scheduled from the Middle East is likely to severely disrupted. Many major oil and LNG tanker owners and traders have suspended deliveries travelling through the Strait of Hormuz until further notice. Currently over 150 tankers are anchored and immobile, those that are not suspended will face mounting delays amid understandable safety concerns. This will have a bullish impact on European gas prices due to lower supply flexibility and increased competition from Asia for LNG sourced from other producers such as the USA.
• Whilst it is difficult to be certain, we do not expect market prices to return to the highs of the energy crisis of 2022 following the Russian invasion of Ukraine. Whilst Europe does utilise LNG from the Middle East, the energy crisis was due to a more significant proportion of gas supply being removed from the market from Russia. Europe’s domestic energy production and import of LNG from non-Middle Eastern producers remains unaffected. Closure to Israeli and Kurdistan gas fields will have minimal to no physical impact on European markets.
• There is some comfort that the current supply and demand situation for electricity and gas in Europe is relatively stable, with milder temperature forecasts and slowing depletion of gas storage unlikely to compound any bullish sentiment that is likely following the attacks on Iran.