Energy Market Briefing

Yemen's Iran-aligned Houthi movement fired a ballistic missile at Riyadh in the early hours of Saturday, the first time the group has targeted the Saudi capital directly since the latest escalation began. Saudi air defences intercepted the missile before it reached its target, and the Houthis said they also struck an Aramco facility at Yanbu with cruise missiles and drones.

The attack followed a week of intensifying Houthi strikes on Saudi oil infrastructure and shipping, and comes alongside continuing Israel-Iran tension since the February war began. US embassies across the region have warned citizens that airspace could close at short notice.

Iran is demanding Washington meet commitments made under the collapsed June memorandum of understanding, including lifting the naval blockade and unfreezing frozen assets, before it will resume talks. There is no sign of a breakthrough, even as markets watch for one.

UK gas for Winter-26 firmed roughly 3% into Friday's close and power followed higher, with gas continuing to set the marginal price. European TTF has pushed further above EUR79/MWh this morning, extending a run that took it above EUR80/MWh for the first time in three years earlier this month.

Brent crude has eased by around 2% today, weighed down by hopes of Iran diplomacy and signs that tanker traffic through the Strait of Hormuz is picking up. The gap between a firming gas market and a softer oil price reflects how differently the two are currently being driven.

Even with oil easing, the forward curve for UK gas and power remains elevated across every season out to Summer-29, a reminder that the market is pricing persistent risk rather than a single event.

US Central Command says the volume of crude, cargo and LNG moving through the Strait of Hormuz over the past fortnight is the highest in six months, with more than a billion barrels of oil and over 2,000 commercial transits escorted through the strait in the past two months.

Saudi Arabia is working to bring back around half the capacity of its East-West pipeline within days, after drone strikes forced its closure earlier this month, with full capacity expected within around six weeks.

None of this amounts to a resolution. Iran has still exported no oil under the blockade, and the easier Hormuz flows described by CENTCOM apply mainly to escorted allied and Gulf tanker traffic rather than a full reopening.