Energy market update: October 2026

October has arrived with energy prices rising and falling erratically as we approach winter.

 Markets continue to wrestle with ongoing tensions in the Middle East, with no obvious signs of a resolution, alongside other factors impacting prices.

Global events have an impact on your business in the UK: it's understandable to feel out of control.

Troo CEO Andrew Richardson offers a monthly energy market update to review what has happened and what is happening in October to help your business navigate this volatile market.

What happened in the energy market last month?

• Wholesale gas prices ended September almost exactly where they began.

• Prices rose about 15% - to the highest level in more than three years - on 14th September before falling by about 12% towards the end of the month.

• The average wholesale cost of gas across the month was still about 24% higher than in August.

• Prices for next summer and beyond rose by around a tenth.
  

• Electricity prices followed a similar path to gas.

In summary…

September was a round trip: gas climbed to its highest in more than three years by the middle of the month and was back where it started by the end, moved mostly by events in the Gulf. Prices can move a long way in either direction within days.

What is driving energy prices?

• Geopolitics: Attacks on tankers and a drone strike that shut a major Saudi Arabian oil pipeline pushed prices up in the first half of the month. Hopes of talks to reopen the Strait of Hormuz, the channel that around a fifth of the world's shipped gas used to pass through, pulled them back down before the US rejected Iran's proposal on 26th September, according to news reports.
• Reserves: European gas storage rose from about 66% full to about 71% during the month, which is still the lowest for the time of year since records began in 2011, according to Gas Infrastructure Europe.
• Outages: Maintenance and unplanned stoppages at Norwegian gas fields cut pipeline supply to Britain and Europe in the first half of the month, and eased towards the end.
• Weather: A mild September across northwest Europe kept heating demand low and helped prices fall in the second half of the month.

What happens next?

Energy markets continue to move sharply on headlines and sentiment, as well as underlying market fundamentals.

Volatility is high.

Nobody knows which way the market will move next.

However, several key factors will determine the direction of prices in the weeks and months to come.

• Geopolitical conflict remains key: The US-Iran conflict is the dominant driver of prices. Re-escalation could send prices higher, a resolution could bring prices down.
• Winter weather could ease pressure: Supply is constrained, but UK demand for heating may be reduced if above-average forecasts prove accurate.
• LNG supply may offer relief: Additional LNG supply, including the potential restart and expansion of shipments from Qatar, could ease pressure on European markets, although the effects may not be felt this winter. 
• Renewable energy could reduce pressure on electricity prices: Increasing wind and solar generation, alongside interconnection, can reduce the extent to which UK electricity prices follow gas prices. 

The outlook remains highly uncertain.

Prices could fall if geopolitical tensions ease, LNG flows improve and winter demand stays low.

But with storage below normal and continued disruption risks, businesses should be prepared for further volatility.

What else do I need to know?

Here are some of the key issues coming up in business energy beyond wholesale energy market prices:

• BICS applications open: The British Industrial Competitiveness Scheme (BICS) is now open for applications. Eligible businesses could reduce their electricity costs by 25%. Read our explainer guide to BICS for full details including how to check your eligibility.

•  Renewables levy: The Contracts for Difference levy, which funds low carbon generation, rose on 1st October after a cut in mid-August. It is still roughly half the rate charged earlier this year, according to the Low Carbon Contracts Company. 

What this means for your business

September showed how quickly energy prices can move.

A business that asked for a renewal price in the middle of the month would have been quoted off a wholesale gas market that was about 14% higher than at the end of September.

If you are on a fixed contract, none of this changed your unit price.

If you bought on a flexible or pass-through contract, September's energy will likely have cost more than August's.

You cannot control these swings, but you can take steps to protect your business from them.

Knowing when your contract ends, understanding your usage and priorities, and knowing what options are available can put you in a stronger position.

We can help. 

Remember: This is general market information and not advice. Your own circumstances will determine what is right for your business.

How we can help

The energy market is changing quickly. Keeping up with the news can be difficult while focusing on running your business and serving your customers.

We get it. We can support you.

Troo exists to help businesses like yours make sense of their energy needs, simplify complex information and make smart decisions that lead to real change and reduced costs.

We are not in the business of predicting which way the market will turn next - and we’d be cautious of anyone who claims to.

What we can do is look at your specific position, your usage and your renewal date, and set out the realistic options.

Book a free energy health check today for practical guidance on your business electricity, gas or water bills.