The Iran conflict has led to thousands of deaths, and hundreds of thousands of people in the Middle East being displaced from their homes.

Its impact has been felt more broadly too, as the war has already caused energy prices to spike across the world.

UK households are justifiably concerned about what this new conflict could mean for their energy bills and the already high cost of living – especially with the Financial Times already labelling it “the new energy crisis”.

In this article, we’ll explain how and why the war is affecting your energy costs, and what practical steps you can take to lessen its impact.

Why is the Iran conflict affecting energy prices?

Energy prices almost always rise when supply falls dramatically – and that’s exactly what’s happened since the Iran conflict began on 28 February 2026.

That’s when the US and Israel launched joint missile strikes against Iran, who responded with attacks on multiple nations across the Middle East, and by warning ships not to cross the Strait of Hormuz.

This narrow waterway between Iran and Oman usually provides passage for 20% of the world’s petroleum consumption and liquefied natural gas (LNG) supply , but Iran has pledged to fire on any ship that tries the journey now.

This unprecedented closure has cut the strait’s traffic by about 92% , as Iran has followed through on its promise, reportedly attacking 13 vessels in (or close to) the strait since the conflict began.

Major suppliers in countries including Iraq, Kuwait, Qatar, Saudi Arabia, and the United Arab Emirates have all cut production, either because they’re running out of storage or because Iran has attacked their facilities.

This all means the world’s available supply of gas and oil has shrunk, which always increases prices. The cost of electricity has risen too, since gas plants are one of the most common ways of producing electricity (more on this below).

What’s happened to gas and oil prices?

Gas and oil prices have spiked globally, with no end in sight.

The cost of Brent crude oil has rocketed up from $73 per barrel before the war started to nearly $120 per barrel on 9 March – the highest it’s been since Russia invaded Ukraine in February 2022.

The price dropped back down before rising to around $100 per barrel on 12 March, with data analysts Wood Mackenzie saying it’ll rise “at least to $150 per barrel in the coming weeks.”

The consultancy added: "In our view, $200 per barrel is not outside the realms of possibility in 2026." This would completely eclipse the record high of $145.29, set in July 2008.

Following the latest attacks on fuel tankers, a spokesperson for Iran's military said: "Get ready for the oil barrel to be at $200 because the oil price depends on the regional stability which you have destabilised".

The price of Europe’s natural gas has increased sharply as well, with a 67% rise in early March representing the largest weekly gain since the 2022 energy crisis.

This is bad timing, as Europe used much of its gas stores during winter.

Why is this affecting UK energy prices?

The UK’s gas price surged to a three-year high on 3 March , and has increased by more than 50% since the start of the war, according to David Miles of the Office for Budget Responsibility (OBR).

Unfortunately gas is a global commodity, meaning that any downturn in supply causes its price to rise here as well.

Just 1.8% of the UK’s gas imports come from Qatar, but if deliveries don’t start again soon, the price of available gas from the region will shoot up.

And even though around one-third of our gas comes from the North Sea, we pay the international market price for it. Suppliers don’t give us a discount because it was extracted domestically.

Wholesale gas rates massively impact UK energy bills, both because we rely on it heavily to heat our homes, and because of the ‘marginal cost pricing’ mechanism, which results in gas setting the price of our electricity about 98% of the time.

The spiralling price of crude oil will have a smaller but significant impact on the cost of electricity, but it’ll also push up the cost of petrol – which will hit energy companies’ revenues and cause them to raise their prices.

Thankfully, most UK households are unlikely to see any immediate impact on their bills as a result of the escalating crisis, due to Ofgem’s energy price cap.

And with the April-June price cap already set in stone, the cost of our dependence on gas will only come to light in late May, when Ofgem announces the July-September cap (more on this below).

What’s going to happen to the July price cap?

The July energy price cap will only be revealed in late May, but it’s expected to be a significant increase on April’s price cap of £1,641 per year for gas and electricity.

Cornwall Insight is currently predicting that it’ll rise by 9.7% , while home finances expert Martin Lewis has said it could go up by as much as 30%.

Even if we take Cornwall Insight’s lower forecast, this will still involve the price of electricity increasing by 4.7%, and the cost of gas flying up by 15.4%, costing the average home £160 more per year.

As if that wasn’t bad enough, EDF is predicting that the price cap will climb 2.9% higher in October – costing you another £52 per year.

A prolonged conflict could lead to elevated energy prices in the long term (more on this below).

UK inflation, which was previously expected to drop from its current 3% position to around 2% this year, is also set to rise.

Energy price cap changes, Jan 2024-Apr 2026

How to protect yourself against energy price rises

There are a few ways to shield yourself against the worst consequences of energy price rises.

Let’s run through your best options.

1. Fix your energy tariff

You should probably fix your energy tariff somewhere around the April price cap’s rates, as long as doing so won’t incur an expensive exit fee.

On 1 April, energy prices will be at their cheapest since September 2024, and if you can take advantage of this to keep your energy bills low for one or even two years, it may be worth it.

It all depends on when you think the Iran conflict will end, though.

For instance, if you’re on a fixed tariff that can see you through to the end of September 2026 – and you think the war will be over by the end of summer – you may want to stay on that tariff.

This will allow you to avoid being on a variable tariff in July, when energy prices are set to spike.

And if the wholesale markets have calmed down by the time Ofgem announces the October price cap in late August, you should be able to find a reasonable fixed tariff.

2. Get a smart meter

Smart meters are free, helpful, and open up a world of new tariffs that can save you money on your energy bills.

They won’t save you money automatically, but by showing how much energy you’re using, they can improve your habits.

86% of smart meter owners said they’ve changed how they do things at home to use less energy, according to Smart Energy GB.

And if you have other green tech – like a solar & battery system, EV charger, or heat pump – you’ll be able to access time-of-use tariffs, which come with a cheaper overnight rate you can use to cut your bills.

Just ask your energy supplier to install a smart meter at your home, and the company will be legally obliged to do so – for free.

3. Switch to solar

Getting a solar & battery system can drastically reduce your reliance on the grid, which lessens the impact of any energy price hikes.

If you generate your own electricity, you won’t have to buy as much from your supplier – and you can sell your excess energy to the grid through one of the best export tariffs.

Export rates are already competitive – with households able to get more than 30p per kWh – and you can simultaneously use a time-of-use tariff to charge your battery overnight with cheaper grid electricity.

In these ways, you can cut your electricity bills by 86%, based on a sample of over 150 systems installed by Sunsave across England and Wales in 2024.

1.6 million UK homes have already switched to solar, with thousands joining them every month.

The government launched the Warm Homes Plan in January 2026, with a promise to fund solar installations for vulnerable households and provide interest-free and low-interest solar loans to other homes – but there’s still no set start date or eligibility criteria.

You can start cutting your energy bills as soon as you go solar, so waiting for this scheme to begin could cost you.

To find out how much you could save by going solar, enter a few details below and we'll provide an estimate.

Could the impact be long-term?

The Iran conflict’s impact on energy prices could certainly be long-term.

On 9 March, Rabobank energy strategist Florence Schmit told Bloomberg: “We see supply disruptions to last for about three months now.”

The energy industry is generally preparing itself to deal with supply chain issues for the rest of 2026, but any time frame largely depends on when tankers can start travelling through the Strait of Hormuz again.

On 12 March, Mojtaba Khamenei marked his first public announcement since becoming Iran’s new supreme leader by pledging to continue blocking the strait.

Saudi Arabia has begun rerouting many of its ships to the Red Sea, but most oil companies are unable to be this agile, and are stuck in bottlenecks as a result.

If they’re unable to shift their product, they’ll be forced to fill their storage facilities and eventually shut down production in the region. Restarting these sites would take time, and cause this crisis to drag on even further.

And even if the strait somehow opened back up today, it would take around six to seven weeks for exports to get back to their previous levels, according to data firm Kpler.

The price of oil hit $100 per barrel again on 12 March, and if this conflict drags on for months, it could stay around there – which is bad news for UK households.

FAQs

Why has the Iran conflict affected UK energy prices?

The Iran conflict has caused the amount of oil and gas being exported from the Middle East to drop dramatically, due to Iran effectively closing the Strait of Hormuz.

When supply falls and demand doesn’t, prices rise, which is why the cost of UK wholesale gas reached a three-year high on 3 March.

The wholesale cost of electricity has increased as well, because gas plants are one of the most common ways of producing electricity around the world – and the global price of energy directly affects UK prices.

However, this won’t affect most UK households straight away, thanks to Ofgem’s energy price cap. You shouldn’t see your energy bills rise until July 2026, at the earliest.

How much have gas and oil prices increased?

The cost of Brent crude oil has increased from $73 per barrel before the war to just shy of $120 per barrel on 9 March. 

It fell before again rising above $100 on 12 March, with data analysts Wood Mackenzie saying the price will go up “at least to $150 per barrel in the coming weeks.”

The price of European natural gas has increased too: a 67% rise in early March was the highest weekly gain since 2022.