Energy Market Briefing

Oman's foreign minister Badr Albusaidi travelled to Tehran on Tuesday for talks with his Iranian counterpart Abbas Araghchi, and the two sides said they had discussed a phased framework for a temporary joint navigation corridor through the Strait of Hormuz alongside a joint project to clear mines from the waterway. Technical talks are continuing towards a permanent corridor and a longer-term arrangement for managing the strait.

UK gas and power both fell hard into Tuesday's close, with the Win-26 season down 2.6% for gas and 2.4% for power, as the prospect of easing Gulf supply risk fed through the curve. TTF eased by a similar margin and Brent crude fell for a third consecutive session to $80.78 a barrel.

Oman's foreign minister said he was hopeful the two countries would soon announce the temporary corridor, but reports say no formal agreement was reached at Tuesday's meeting, and further negotiation is still needed before anything is signed.

Iran's deputy foreign minister said the Strait of Hormuz remains closed despite the transit talks with Oman, insisting Washington must first return to its commitments under an earlier memorandum of understanding before the waterway can fully reopen.

The US State Department said it was taking concrete action to end the threat from Iran by cutting off Tehran's remaining financial lifelines, with further measures to follow recent sanctions. President Trump said all mines had been cleared from the strait's international waters and warned that any vessel laying new ones would be destroyed.

Actual traffic through the strait remains a fraction of normal, with only around three ships transiting on 23 August against roughly 85 a day under normal conditions, a reminder that little has changed on the water so far despite the diplomacy.

Separately, Shell's Ormen Lange field remains around 40% below capacity after a compressor failure, with the repair window pushed back to February 2027, while an unplanned outage at the Kårstø processing plant has cut a further 30mcm a day of flows. Both continue to constrain Europe's ability to rebuild storage before winter, regardless of how the Gulf talks progress.

Ofgem's new price cap for October to December will push the typical annual dual-fuel bill to £1,723, up £60 (3.6%), even after the government's cut to VAT on domestic electricity, taking household bills to their highest level in three years.

The new quarterly cap sets typical unit rates at 26.11p/kWh for electricity plus a 57.19p daily standing charge, and 7.33p/kWh for gas. These are regulated retail rates covering the full cost to serve, not the wholesale commodity prices quoted elsewhere in this briefing.

The rise reflects wholesale gains built up over the past year of Gulf tension. EU gas storage stood at 63.3% full as of 24 August, still some way below the five-year seasonal average, which is part of why the price path into winter, and therefore bills, stays more exposed than usual.