During the past weekend this turned the other way. A deal to end the US-Iran war has taken some of the heat out of wholesale prices, a welcome change after a spring of the opposite. But it is the start of an easing, not an all-clear, and pub bills will not snap back to where they were before the conflict.
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Market update
The US and Iran announced a deal to end the war on 14 June, with a formal agreement due to be signed on Friday, and European governments, including the UK, have backed it. Wholesale gas, power and oil all fell on the news. Gas for the months ahead came down around 10% in a few days, and oil hit a three-month low. The market is pricing out the conflict premium that has sat in pub bills since spring, so for the first time in months the direction of travel is clearly down.
This is not a clean run to lower prices, though. The Strait of Hormuz is reopening but not yet back to normal. Hundreds of ships are still waiting to pass and traffic will take months to recover. The deal is not yet signed either, with the terms unpublished and the nuclear question open. The fall is real, but reversible.
The floor underneath is still higher than before the war. Gas storage across Europe was about 44% full in mid-June, below the five-year average, and with Qatar’s export plants years from repair every summer cargo is contested. Weather adds to it: after a cool, wet start to June the Met Office leans warmer than usual for the summer, and for pubs the strain is cooling not heating, with cellars, beer lines and fridges working harder on every hot day.
Business energy costs
The deal has started to feed through to wholesale costs: at our 15 June sample, gas sat around 0.9p per kWh above the pre-conflict level, down from 1.2p last month. That is the clearest sign yet that the premium is starting to unwind. But the unit rates suppliers quote have not caught up yet, so the saving is in the pipeline rather than on the bill. Electricity is a separate story. Even as wholesale power eases, network and policy charges keep climbing, with transmission charges alone up around two-thirds from April, so an electricity bill will not follow gas down. Treat the two as separate decisions.
For licensees, the question is timing. If your contract ends within three months, get fresh quotes now, because offers have improved this month and locking in the easing beats waiting for a bigger fall the supply picture does not support. If you are six to twelve months out, you have room to watch, but plan on rates near today’s, not last year’s, and watch the standing charge as closely as the unit rate.
For a single site it is a fixed daily cost whether the tills are busy or quiet. And if you are taking on a new tenancy, deemed rates run well above a competitive contract and a slow change of tenancy can leave you on them for weeks, so sort the supply before you pull your first pint.
Nationwide Energy offers the support you need to make your next energy contract transition smoother, deal with supplier issues, or review your energy consumption.
