Energy prices rose sharply in late July as geopolitical tensions, European gas storage concerns and global competition pushed markets higher. UK supply remained stable, but business contracts were affected. Key is to check renewal dates, usage, and options early rather than trying to predict prices.

Energy markets moved sharply upwards during the final full week of July, providing another reminder that business contract prices can be affected by events far beyond the UK.

Fidelity Energy’s report dated 27 July said gas and power prices had reached their strongest levels since the latest crisis began. Gas climbed to a four-month high as geopolitical escalation combined with concerns around European gas storage, international competition for liquefied natural gas and reduced French nuclear output during the heatwave.

The report showed particularly strong movement across longer-term prices.

Twelve-month gas pricing was 14.2% higher over one week and 32.8% higher over one month. Twelve-month electricity pricing rose by 10.8% over the week and 24.9% over the month. Longer 24-month and 36-month prices also increased.

For businesses, the important point is not simply that prices rose.

It is that the market was being driven largely by international headlines and expectations rather than a shortage within the UK.

Fidelity reported that UK supply fundamentals remained relatively comfortable, but prices still moved upwards because the wider European and global market was reacting to conflict, storage levels and competition for available gas supplies.

Why global events affect UK business contracts

The UK is connected to the wider European energy market.

Even when domestic supply is comfortable, concerns about international shipping, gas storage or nuclear generation can influence the price suppliers expect to pay in the months and years ahead.

Commercial contracts are therefore not based only on the cost of energy today.

A business arranging a one, two or three-year contract is buying into expectations about future supply, demand and risk.

That is why a short period of easing does not always immediately translate into lower renewal offers, and why a sudden international development can quickly push forward prices upwards.

Some relief, but uncertainty remains

The tone changed towards the end of the reporting period.

Fidelity said a pause in hostilities created the first meaningful sign of relief in more than a month, with oil prices falling as diplomacy was given more space. However, the report also stressed that the coming days would show whether the de-escalation would last.

For businesses, this means the market remains difficult to predict.

Waiting may result in an improved opportunity if tensions ease further. It could also expose a business to higher prices if the situation deteriorates again.

There is no universal answer to the question, “Should we fix now or wait?”

The right decision depends on the business’s contract end date, appetite for risk, usage, budget and the options currently available.

What businesses should do now

The practical response is not to panic or rush into a contract purely because the market has risen.

It is to establish how much time is available and make sure the business understands its existing position.

Check when each contract ends, confirm which meters and sites are included and review current consumption.

Businesses with several premises should also make sure that no individual supply has been missed or allowed to move onto out-of-contract rates.

Depending on the supplier, agreement and usage, it may be possible to begin reviewing a contract much earlier than expected.

That additional time allows the business to observe the market, compare different contract lengths and decide when the available option fits its circumstances.

Planning matters more than predicting

Nobody can guarantee exactly what the wholesale market will do next.

The latest report demonstrates how quickly prices can move when geopolitical events change.

Businesses do not need to predict the market perfectly.

They do need to know their deadlines, understand their usage and leave enough time to make a considered decision.

That is the best protection against being forced into a rushed renewal while the market is volatile.