Energy Market Briefing

The Houthi militia has claimed missile, cruise-missile and drone strikes on two Saudi-flagged tankers, the Encelia and Layla, in the Red Sea on Thursday, with a Saudi news agency confirming one vessel ablaze. It adds a second maritime flashpoint alongside the Strait of Hormuz, which remains effectively closed to commercial shipping months after its declared closure, with major carriers still rerouting via the Cape of Good Hope and war-risk insurance running many times normal levels.

The US military has now carried out twelve consecutive nights of strikes on Iran, with the latest wave widening to western and central Iran. Iran's foreign minister has described Tehran's doctrine as an eye for an eye, while President Trump has floated striking a suspected deep underground nuclear site, keeping the risk of further escalation live.

Iran's interior minister travelled to Pakistan this week to press Islamabad to keep mediating, while Trump told a rally that Tehran is not yet ready to make a deal. The UK has begun withdrawing diplomatic staff from Iran, underlining how the security situation is being read in Western capitals.

At the last Market Table close on 22 July, the UK Win-26 gas season stood at 5.14p/kWh, up 4.4% on the day, with the UK power Win-26 season at 12.74p/kWh, up 3.8%; every front season out to Sum-29 closed higher, gas leading power as usual. TTF added a similar move, up around 3.3% to near 61.69 EUR/MWh, tracking the same Gulf-driven risk premium.

GridWatch shows UK wind generation down to around 3.7GW, its lowest in a fortnight, with solar, gas and net interconnector imports making up the shortfall. Thinner wind removes one of the few offsets to the current price pressure.

Brent crude touched around $98.4/bbl on Thursday morning, a six-week high and up roughly 4.6% on the day, as reports of tanker attacks off Saudi Arabia and renewed US threats against Iran outweighed earlier signs of diplomacy. Reduced Gulf LNG availability is also pushing European buyers into costlier competition with Asian importers for cargoes.

President Trump has approved an agreement allowing Saudi Arabia to develop a civilian nuclear programme with the potential to enrich uranium domestically. The move sits awkwardly alongside the stated US goal of stopping Iran doing exactly that, and critics argue it could blur the non-proliferation message even though the Saudi programme is framed as civilian.

The concern is that raising enrichment capability anywhere in the Gulf, even under civilian cover, sets a precedent that is hard to contain once the current conflict eventually cools. That keeps a long-run geopolitical risk premium attached to the region even if today's fighting were to stop.