Britons face ‘risk premium’ for energy as US-Israel war on Iran intensifies

What the report says

Britain is facing another rise in household energy costs as the conflict involving the United States, Israel and Iran continues to disrupt global gas markets, according to Al Jazeera. The UK energy regulator Ofgem said the price cap for gas and electricity in England, Scotland and Wales will rise by 4 percent from October 1, 2026, after wholesale gas prices climbed sharply. Ofgem also said wholesale prices have increased by 11 percent over the past three months, reflecting continuing pressure on international energy supplies.

The reported increase comes as many households are already dealing with a prolonged cost-of-living squeeze. Al Jazeera noted that people on fixed-rate contracts will be temporarily shielded, but many others are expected to pay more through the winter. For a typical household, the regulator’s move is expected to add about 60 pounds a year. The UK government paired the cap rise with a tax cut on monthly electricity bills, but analysts quoted in the report said that measure does not address the underlying market disruption.

The article says energy experts see a wider “risk premium” being built into prices because of geopolitical instability, especially around the Strait of Hormuz, a key route for global oil and liquefied natural gas shipments. It also links the latest UK increase to earlier energy shocks after Russia’s invasion of Ukraine, when Britain became more dependent on supplies from the Middle East. The development matters because higher energy costs can feed into inflation, household budgets and business spending as winter approaches.