Recent geopolitical tensions have once again introduced significant volatility into global energy markets. As seen in previous periods of instability, even the risk of disruption to key oil and gas supply routes can trigger sharp movements in wholesale prices.
For UK businesses, this creates a challenging environment where energy costs can shift quickly, making timing and strategy increasingly important.
Why are energy prices rising?
Energy markets are highly sensitive to global events. When there is potential for supply disruption, markets tend to react in advance, pushing prices higher. This has led to rising wholesale gas and power prices, increased short-term volatility, and fewer opportunities to secure favourable rates.
While these movements are driven by global factors, the way energy is procured can have a significant impact on how exposed a business is to these fluctuations.
What we’re seeing across managed energy portfolios
Although no strategy can completely eliminate risk, businesses with structured procurement approaches have generally been better positioned to manage recent volatility.
Those that secured energy ahead of recent price increases are now seeing clear benefits. Across a number of managed portfolios, pricing is currently tracking at around 20% below the market for the coming 12 months. In many cases, positions remain below both current market rates and original contract baselines, representing meaningful cost avoidance over the year ahead.
This reinforces the value of acting during more stable market conditions, rather than reacting during periods of sudden price spikes.
The value of staged purchasing strategies
Basket-style purchasing, where energy is bought in stages over time, has also proven effective in managing risk. By securing energy during lower points in the market, including dips seen in recent months, businesses have been able to reduce their exposure to sudden increases.
Current positions suggest power pricing is typically around 10% below market levels, while gas pricing is often closer to 20% below. Rather than attempting to time the market perfectly, this approach spreads risk across multiple trading points, creating a more balanced outcome.
Supporting businesses on flexible contracts
Volatility affects organisations of all sizes, and businesses on flexible or entry-level strategies can be particularly exposed without active management.
Recent activity across these portfolios shows that energy secured during lower market periods continues to deliver value. Ongoing adjustments are helping to limit exposure to further increases, while additional strategic recommendations are being used to manage risk beyond standard approaches.
Performance across these contracts reflects this, with power positions averaging around 10% below current market levels and significantly below original baselines. Gas contracts are also, in most cases, performing ahead of initial expectations.
Key takeaways for UK businesses
As markets remain uncertain, several clear themes are emerging. Volatility is likely to persist while geopolitical uncertainty continues, and passive energy strategies carry greater risk in fast-moving conditions. In contrast, structured and flexible procurement approaches can improve cost control, with timely decision-making remaining critical.
Navigating the months ahead
While global events cannot be predicted, their impact on energy markets is becoming increasingly familiar. Businesses that take a proactive and structured approach to procurement are often better placed to manage both risk and opportunity.
In the current climate, the focus is less about chasing the lowest possible price, and more about building resilience against ongoing market uncertainty.
