How the Iran conflict could affect UK energy bills in 2026

There’s a contradiction looming with energy bills right now.

From April 2026, energy prices will come down because of changes in policy – which, after the last few years, is definitely a relief.

But at the same time, UK gas prices have more than doubled since late February, triggered by the conflict in the Middle East.

So this isn’t really a turning point. It’s more of a pause – before we start to see the full impact of these events.

What the April price drop means, what it doesn’t

Let’s unpack the April drop first, and what’s really driving it.

Policy-driven, not market-driven

The Autumn Budget outlined plans to move some environmental and social policy costs away from energy bills and into general taxation. These changes are mainly linked to reforms to the Energy Company Obligation (ECO) and the Renewables Obligation.

This is helping bring the bill down in April, by an average of around £150 a year.

So the savings are real. But it’s not because the cost of energy itself has fallen.

Why gas prices are rising in the UK right now

To make sense of what might happen next, we need to zoom out. 

Supplies are disrupted 

At the centre of this is the Strait of Hormuz – a narrow stretch of water between Iran and Oman that carries around 20% of global LNG and seaborne oil. Right now, that flow is disrupted, creating uncertainty everywhere.

The local effect of global pricing

The big buyers are now looking at other sources. That’s pushing prices up across the global market.

And even though the UK doesn’t rely heavily on that region, we’re still paying the same global prices – so when they rise, we feel it here too.

When does that actually show up on your bill?

Not straight away, and this is the bit that often catches people out. If you’re on a standard variable tariff, what you pay is linked to the energy price cap set by Ofgem. 

The built-in delay

That cap is updated every three months, based on average wholesale costs, amongst other things. So there’s always a delay between what’s happening in the market and what shows up on your bill.

The next key moment is the July 2026 energy price cap – when the recent changes start to come into play.

Could bills rise again later in the year?

This is the question on most people’s minds. 

Where prices are heading

Early forecasts show energy bills could climb by £160 a year from this July, costing a typical household close to £1,800.

The OBR has said this kind of pressure could also push inflation up by around 1 percentage point, adding to overall living costs.

Nothing is fixed yet, but these are strong signals. 

Should you fix your energy prices now or wait?

There isn’t a one-size-fits-all answer – but there’s a simpler way to look at it.

Flexibility vs certainty

If you stay on a variable tariff:

• your price follows the price cap

• so it can go down, but also go back up

If you fix:

• you lock in your rate for a period

• so you’re protected if prices rise again

If you’re weighing it up, how fixed energy tariffs compare to variable options is worth understanding.

One important thing to know:
The April reduction applies either way – so you won’t miss out if you fix.

Save more by looking at the bigger picture

Energy is just one part of your monthly spend. And when that becomes less predictable, it often makes sense to look at everything together.

Bundling as a buffer

Utility Warehouse brings energy, broadband and mobile into one bundle, helping you manage your overall cost of living. 

That can mean:

• competitive energy tariffs

• savings when you combine services

• a bit more stability when prices move around

It’s why more people are looking at UW energy along with broadband and mobile, rather than treating them as separate bills.

The bottom line

There’s real relief in April – but it may not last.

This is the window to get ahead of what comes next. Our fixed and variable tariffs already include April's reductions to help you save and make sure you’re getting better value across your bills.