Prices increase for the eighth consecutive day amid Red Sea supply fears

Gas prices increased at the NBP for its eighth consecutive session on Wednesday as Red Sea supply fears resurfaced, threatening another vital global waterway.

On Monday, the Iran-backed Houthis issued a maritime embargo on Saudi Arabia. The Houthis, who control a large part of Western Yemen amid the ongoing civil war, have threatened to attack any Saudi vessels attempting to transit the Bab al-Mandab Strait.

Just like the Strait of Hormuz, Bab al-Mandab is a vital sea route for global trade, serving as a gateway to the Red Sea and subsequently the Suez Canal.

Houthi attacks in the region were a major contributor to the price spikes seen in 2024 and 2025. News of explicit threats will no doubt be serving as a key source of support and risk premium for the curve.

On the power side, sustained strength on natural gas and crude oil markets continued to serve as a primary source of support for baseload prices on Wednesday.

According to data from ICE, the NBP front-season contract has risen 41.1% since 1st July and Brent has risen 31.4% over the same period – reflecting the geopolitical instability we have seen over the past few weeks.

High levels of imports have served as a secondary source of support so far this week. According to Elexon data, imports from Continental Europe accounted for approximately 25.5% of the power mix between Monday and Wednesday, serving as the single largest source of supply in the grid.

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Price commentary courtesy of Crown Gas and Power