After last week’s bearish movement saw gas and power forwards drop to 2-month lows, this week has seen a small rebound. The front month gas contract, which is now August 26 delivery, briefly hit its highest level since the memorandum of understanding was signed between the US and Iran, with Winter 26 and Summer 27 contracts following a similar trajectory. Power forwards have seen a similar rebound, with August 26 setting a fortnight’s high. Winter 26 power rebounded strongly early in the week, but remains below the psychological £100/MWh barrier.

The Middle East remains the primary driver of price movement, with close attention paid to the success – or otherwise – of peace talks between the US and Iran. Despite an agreement to halt strikes, over the weekend, the US launched strikes on Iran over two consecutive days, following an Iranian strike on the Ever Lovely in the Strait of Hormuz. US Central Command stated that “US military aircraft targeted Iranian military surveillance infrastructure, communication systems, air defense sites, drone storage facilities, and minelayer capabilities.” In turn, Iran launched a series of missile and drone attacks on Kuwait and Bahrain. On Saturday, the UK Maritime Trade Operations agency raised the threat level in the Strait of Hormuz to “substantial” after an oil tanker was struck by an “unidentified projectile.”

Maritime energy traffic via the Strait of Hormuz, while improved slightly since the signing of the memorandum of understanding, remains well below pre-war levels. In the specific context of LNG, the six months prior to the war saw an average of just under 90 tankers per month transit the Strait. Since the weekend’s strikes, LNG transits have been near zero, with Liberia-flagged vessel Umm Al Ashtan’s transit on Monday the sole crossing.

Italian utility firm Edison has announced QatarEnergy has again extended the ongoing force majeure, covering up to September 2026. Edison has confirmed it can meet all commitments to its customers thanks to alternative sourcing. The war and closure of the Strait of Hormuz has prompted many of the world’s LNG importers to look ad diversifying their portfolios, often to the benefit of US LNG exporters near the Gulf of Mexico.

Investment funds have slashed net length on the Dutch TTF again, reducing long positions from 365TWh to 334TWh, bringing total net long position to 153TWh.