Now the strikes have paused with Iran and Oman stating a shipping corridor through the Strait of Hormuz is agreed in principle.
Wholesale gas is more than 10% off its late-July peak, but nothing is signed, and supplier price books have only just caught up with July’s spike. Here is what that means for pub bills, and what licensees can do about it.
Market update
The strikes paused at the start of August, talks have restarted, and Iran and Oman say a supervised shipping corridor through the Strait of Hormuz is agreed in principle. Wholesale gas has dropped more than 10% from its late-July peak on the news. But nothing is signed, and winter gas still costs the same as next month, so the market is pricing hope, not resolution.
European gas stores were about 58% full at the start of August, the lowest for the season in almost two decades, because filling tanks at war prices makes no sense.
England has just had its driest July on record and the heat is back in mid-August – keeping cooling demand high while stores should be filling. That thin buffer is why prices for the months ahead have not fallen as far as the headlines.
The record July cut both ways for pubs and restaurants. Hot weather lifts garden and wet trade but dents food sales and works cellar cooling hard, and JD Wetherspoon has issued its fourth profit warning this year, naming energy among its rising costs. A renewal sorted now beats one forced on you in autumn.
Business energy costs
Two things happened at once this fortnight: wholesale eased, and quoted rates rose as suppliers priced July’s spike into their offers. Gas commodity cost is now about 2.1p per kWh above its late-February pre-conflict level and electricity about 4.4p, both down from a fortnight ago.
For licensees it comes down to timing. If the corridor deal is signed, cheaper offers should follow within weeks, and if it falls apart prices go straight back up.
Contract ending within three months? Get fresh quotes now and be ready to sign because suppliers are changing their price books so often that a good offer may not survive the week.
Six to 12 months out, don’t fix at war-premium prices. And if you are taking on a new tenancy, deemed rates still run at close to double a contract price, so sort the supply changeover before you pull your first pint.
Next summer is already priced about a third below this winter, so the market itself expects this to pass. Shorter terms that bridge to those cheaper years beat locking the premium in, and pub groups can align contract end dates across sites so no one site is forced to renew into a spike.
Nationwide Energy offers the support you need to make your next energy contract transition smoother, deal with supplier issues, or review your energy consumption.
