How Israel, the US, and Iran Affect the UK Energy Market and What This Means For Your Business 

The world is watching the Middle East with bated breath following US airstrikes in Iran and Iranian retaliatory attacks. Geopolitical events directly affect the global and UK energy market, which have been highly sensitive to these events. In the context of the ongoing conflict in Gaza, these latest events have shown the speed at which things can escalate.  

Many businesses are trying to understand the implications of the conflict and take action. In times of uncertainty, it’s important to take control of what you can. While the market response has not reached the same levels, the Russian war on Ukraine provides historical reference for worrying market trends. With energy a key operational necessity, it is essential for businesses to look to their energy contracts to build resilience in a volatile market.  

How the Markets Reacted To Events in the Middle East 

The following are some of the energy market effects following the latest developments in the Middle East.  

• – The price of Brent crude rose to its highest price in 5 months following the US airstrikes and Iran’s retaliatory attacks. The region is home to 5 out of the world’s top 10 oil producers and 3 of the top 20 gas producers. There is limited immediate impact on global supply, but this has shown the trigger reaction to changes in the market. Higher oil prices are connected to higher overall inflation and energy prices. 

• – Iran has the power to block the Strait of Hormuz. This is one of the world’s most important shipping routes and a conduit for about 30% of the world’s sea-borne oil and around 20% of LNG shipments. This action would have the effect of disrupting the flow of oil and gas. While the likelihood of closure is far from certain (and alternative routes could be arranged), the risks of passage have already impacted prices. 

• – Geopolitical risk is the new normal. Market volatility is immediate and highly sensitive to circumstances as they change). However, the markets are also building enduring risk into their calculations. This is a period of fragile ceasefire and, even if full-scale war is avoided, the risk of future escalation is reflected in market behaviour and an integrated risk premium. 

Is Now the Time to Fix Your Business Energy Tariffs? 

While the market has fluctuated around actual and perceived threats in the Middle East, this is a crucial point for businesses to look to their energy contracts. There is no way of telling what the market will do in the future, but we know it is fragile and sensitive to change in this tense climate. 

The slight cool-down in pricing presents a prime opportunity for businesses to proactively avoid future wholesale price surges and potentially save a lot of money. 

Is Your Business Energy Contract Up For Renewal? 

If your contract is up for renewal, contact us today to find out more about the best options for your business. We’ll handle everything from sourcing quotes from leading suppliers to implementing switches on your behalf. With the situation changing daily, please get in touch as soon as possible.  

If you’re not sure on whether it’s time to switch, get in touch with us and one of our energy experts will advise you on the status of your contract and the best way forward. If you’re already a customer, your dedicated account manager is always on hand to discuss your concerns. 

Long Term: A Managed Approach to Business Energy 

Market uncertainty is worrying for every business. This underscores the need for smarter energy management practices to ensure your business reduces waste. Proactively monitoring consumption and adjusting behaviour is crucial to control energy spend, ensure billing accuracy, and achieve more sustainable operations.  

• – Smart meters and smart energy management platform simplify collection and analysis of consumption data.  

• – Identify easy gains and create a roadmap for change to cut consumption without disruptions to your daily operations. 

• – Use data to ensure billing accuracy (and reduce the time and admin required to resolve disputes). 

• – Understand your business’s energy requirements to implement commercial solar and renewable energy alternatives.  

• – Build more a more resilient business for the future – in line with ESG and environmental regulations in mind. 

Contact Smarter Business Today 

Contact us today to find out your options. Our team is on hand to provide competitive quotes from leading energy suppliers and a complete switching and smart energy management solution for your business.