Is the Iran-Israel conflict affecting energy prices?
The devasting impact of ongoing conflicts not only affects those involved but can also create a ripple effect across the world – this is no different when it comes to the impact of energy prices.
If energy supplies are compromised, this can drive prices up.
How is the Iran-Israel conflict impacting the energy market?
The recent ongoing Iran-Israel conflict has been causing major volatility in energy markets, and in turn can affect energy prices.
According to our energy suppliers at Bionic, the UK Power market saw a sharp +8% increase in the baseline rate this quarter – this includes wholesale energy prices.
Why does this matter? Energy suppliers tend to buy energy in bulk, so if wholesale prices rise, then so do retail prices – the price you end up paying.
The ongoing conflict has raised global concerns that the Strait of Hormuz could be blocked - one of the most important oil shipping routes. This route is key for global oil supplies.
What is the Strait of Hormuz?
The Strait of Hormuz is a narrow waterway that stretches 21 miles – about the same width as the English Channel. It sees 20% of global crude oil supplies and 12% of global LNG supplies pass through it on a regular basis.
Global economies depend on it, therefore, any delays or blockages could potentially affect prices across the globe - this includes the UK.
Does this affect business energy prices?
Yes, potentially, as business energy is bought from wholesale energy markets by suppliers.
On June 24, America announced a ceasefire between Iran-Israel. According to our suppliers, this seems to have reversed the spike in energy prices and stabilised the market. However, tensions still remain high.
What should I do?
Although prices seem to have stabilised, global uncertainties still remain - you never know when prices could spike again.
If you haven't already, now is a good time to fix your rates. This can give you some stability over what you’ll pay throughout your contract. And if you’re approaching your current renewal window, it never hurts to compare quotes to see if you can get better rates.
UK SME’s already pay some of the highest energy costs in Europe. And, while we can’t control the market – we can help make sure you’re getting a great energy deal. Our energy experts compare tariffs from a panel of trusted UK suppliers and help you switch to a smarter contract to get a great deal on business energy, gas, or electricity.
It can also help to know why you’re paying more, so you can take back a bit of control.
From understanding the energy mix to exploring smarter tariffs and investing in renewables, head over to our energy guides to find out everything you need to know.
