What Happened
Why have gas prices gone up in 2026? The Iran conflict sent UK gas prices into a spike not seen in over 12 months. Over the first weekend of March 2026, US and Israeli strikes on Iran triggered a broader conflict in the Middle East near the Strait of Hormuz. Iran threatened to close the strait - the route for a third of global crude oil and most LNG heading to UK gas supply routes.
The Qatar LNG halt hit hardest. QatarEnergy halted production at its Ras Laffan facilities after Iranian drone strikes. Qatar supplies around 20% of global LNG. Removing that volume sent shockwaves through the wholesale market and energy supply chains worldwide.
The UK wholesale gas price in 2026 jumped from around 77p/therm to a peak of 151p/therm - UK gas prices doubled in days. Prices have since eased to around 145-148p/therm but remain far above late February levels. Is this another 2022 energy crisis? Not yet. In 2022 prices peaked above 500p/therm and stayed high for months as Russia cut gas supplies. This spike is sharp but could reverse fast if the conflict de-escalates.
This is a live situation. Figures reflect 3 March 2026. Whether prices stay high depends on the conflict, Qatar's production restart, and shipping routes. We will update as things develop.
What It Means for Your Bills
How does the wholesale gas price reach your household bill? Ofgem sets the price cap each quarter based on wholesale market costs for a typical household. The current Q2 cap of £1,641 runs until 30 June. Your rates and standing charges cannot change before then.
Will the price cap go up in July 2026? Ofgem sets the July 2026 price cap (the Q3 2026 price cap) using wholesale prices from March to May. The energy price cap prediction for July depends on whether the Strait of Hormuz disruption keeps pushing up UK energy bills. Cornwall Insight and Stifel both warn the cap could rise toward £2,500 if the spike holds.
Martin Lewis on gas prices and the Iran conflict called this a large "if sustained." He urged anyone on standard variable tariffs to check fixed deals. But energy price shocks from conflict can reverse fast. If Qatar resumes LNG production or a ceasefire emerges, prices could fall back sharply.
Why the Summer Cap Matters Less Than You Think
July to September is when UK households use the least gas. Just 11% of your annual gas falls in Q3 by volume. On a cost-weighted basis, Q3 accounts for only 8% of annual gas spend - because gas costs less in summer.
Even in the worst case (cap at £2,500), the extra gas cost for the summer quarter is around £35 above today. The annual cap headline sounds alarming. The summer reality is far more modest.
The real risk is winter. The Q4 2026 (October) and Q1 2027 (January) caps cover the heating season, when you use 71% of your annual gas. If prices stay high, a £2,500 Q1 cap would mean roughly £468 in gas for that quarter alone.
Should You Fix Your Energy Tariff in 2026?
Should you fix your energy tariff now in March 2026? Is it worth fixing before the July price cap? Do not rush. Three things to keep in mind:
- You have protection until 30 June under the current cap. No urgency based on the spike alone.
- Q3 bills are naturally low. Even a sharply higher July cap costs around £73-96 in gas for the quarter.
- Post-spike fixed tariffs may carry a fear premium. Only fix if the rate is below the current £1,641 cap. Locking in above £1,800 could backfire if prices ease. Energy suppliers are already repricing fixed deals.
Already on a fixed tariff? Stay put. Do not exit during a market spike.
The watch-point is autumn. Monitor whether prices stay high through summer. That feeds into the Q4 and Q1 winter caps, where sustained prices would hurt most. Network charges are also rising separately, adding pressure regardless of this crisis.
What Happens Next
Three things will decide what happens in the short term. How long does the conflict in the Middle East last? Does Qatar resume LNG production? Does Strait of Hormuz shipping return to normal?
- Q3 cap: Announced 27 May 2026. If prices hold through spring, the cap will rise.
- Government response: The UK intervened in 2022 (Energy Price Guarantee) and 2025 (policy cost removal). No announcement yet.
- Fixed deals: Suppliers will reprice or pull deals as hedging costs rise. Pre-spike rates are disappearing.
Check whether a fixed deal below the current cap is still available from your energy supplier. Make a calm decision, not a panicked one. Around 73% of UK homes heat with gas. Because gas sets the price for much of UK electricity generation, electricity bills follow gas prices too. An LNG shock hits both your gas and electricity bills at once. A typical household paying by direct debit feels the full impact when the next cap takes effect. The Ofgem state of the market report draws similar conclusions on UK gas exposure.