Energy prices in the UK don’t exist in isolation. They are shaped by a complex mix of global supply chains, infrastructure, policy, and, at times, geopolitical uncertainty.
Recent developments in the Middle East have highlighted just how interconnected energy markets are. Disruption to oil and gas production and shipping routes has led to sharp movements in global prices, with knock-on effects now being felt across the UK economy.
For businesses, the challenge is no longer just rising costs. We’re now also looking at unpredictability, as well as the difficulty of planning ahead around it.
Responding to the latest economic update: Middle East conflict and the UK economy, we sat down with our MD, Gary Brandwood, at Perfect Sense Energy to discuss how geopolitical conflicts, in this very case in the Middle East, can result in the rise in energy prices, and how UK businesses can prepare for and respond to it.
Why energy prices have become harder to predict
The UK is a net importer of energy, which means global supply disruptions can quickly translate into domestic price increases.
Recent instability has affected critical routes such as the Strait of Hormuz, through which a significant proportion of the world’s oil and gas passes. In March 2026, an estimated 20 million barrels of oil per day were impacted, with global production reduced by around 10%.
Image courtesy of House of Commons Library
The result has been sharp price increases:
- Brent crude rising from around $70 to over $100 per barrel
- UK wholesale gas prices increasing by roughly 75%
- Fuel prices rising significantly across petrol and diesel
These shifts are already feeding into the wider economy. UK inflation is now expected to sit between 3% and 3.5% in mid-2026, while interest rate cuts have been delayed, and further increases remain possible.
For businesses, this makes operations even more challenging as it means higher costs, tighter margins, and less certainty about what comes next.
The real challenge: Planning in an unpredictable market
Energy volatility doesn’t just affect bills, it also affects decision-making. Without a clear view of future costs, businesses face:
- Difficulty setting accurate budgets
- Pressure on pricing and margins
- Reduced confidence in long-term planning
Even fixed contracts only offer short-term protection. Keeping his watchful eye, Gary shares, “It’s very rare that businesses have certainty of power for much more than a year or two.”
And when energy is a significant overhead, that lack of visibility arguably becomes a strategic risk. The Enterprise Research Centre found, “Each year many small businesses are born in the UK, but most do not survive in the longer term, and only a minority experience high growth.” And, granted, geopolitical instability and rising costs are among top challenges for small businesses.
How businesses can plan for energy uncertainty
Rather than simply reacting to rising costs, more businesses are taking steps to reduce their exposure to volatility altogether.
1. Shifting from cost management to risk management
Traditionally, energy has been treated as a cost to minimise. Now, it’s increasingly viewed as a risk to manage.
For many businesses, this means asking different questions:
- How exposed are we to market fluctuations?
- What proportion of our energy costs can we control?
- How predictable are our costs over the next 3–5 years?
Gary explains, “If you are 100% relying on buying power from the grid, then you’re at the mercy of geopolitical issues that happen from time to time.” This simply means reducing that exposure is becoming a priority.
2. Reducing reliance on the grid
One practical way businesses can address this is by generating a proportion of their own energy on-site. Solar PV is one of the most accessible options, particularly for those with available roof space.
Gary points out, “Most of our customers will have a contribution from solar of anywhere between 10 and maybe 50% of their annual demand. That insulates them from the volatility of the prices.”
This doesn’t eliminate reliance on the grid entirely. But it does reduce it—creating a more balanced and predictable energy profile.
The practical first step would be to assess how much of your site could be used for generation, and what proportion of your energy demand could realistically be covered.
3. Treating energy as a long-term investment
Another shift is how businesses think about energy projects. Rather than short-term savings, the focus is increasingly on long-term stability.
“Solar PV is a long-term strategic investment. It’s definitely being seen as a strategic requirement now rather than a luxury,” Gary observed.
With systems typically lasting 25–30 years, on-site generation can:
- provide a predictable cost for a portion of energy use
- reduce exposure to future price spikes
- support long-term financial planning
In a volatile market, that kind of visibility is valuable.
4. Taking a first step towards energy independence
For many businesses, the starting point is simpler than expected. Initial assessments can often be done quickly, using existing data and site information.
Gary comments, “It doesn’t take long to actually assess how much power can be generated on your particular roof.”
From there, businesses can build a clearer picture of:
- potential energy generation
- cost savings
- return on investment
It’s worth noting that exploring options doesn’t require immediate commitment, but it does provide clarity. Try our solar savings calculator and see how much you could save in minutes, without obligation.
Looking ahead
Geopolitical uncertainty isn’t new, and, frankly, it’s unlikely to entirely disappear. But the way businesses respond to it is changing. Rather than reacting to each fluctuation, businesses, like yours, can take proactive steps to build resilience into their operations.
Because in today’s energy landscape, greater certainty provides much greater advantage than lower costs. And for businesses planning ahead, that visibility can make all the difference.
If you’re exploring ways to bring more visibility and certainty to your energy costs, our team at Perfect Sense Energy is always happy to chat and help you understand what might be possible—completely without obligation. Get in touch today.
