Martin Lewis Warns October Price Cap Still Higher After US-Iran Deal
martin lewis said falling natural gas prices after the US and Iran signed a framework deal may bring some relief for households, but not enough to stop the October energy price cap from landing significantly higher. The deal pushed wholesale gas down nearly two per cent, yet the next cap still looks elevated unless prices drop much further.
That leaves households on standard variable tariffs with only partial relief. Around 60 per cent of homes across England, Scotland, and Wales are on those tariffs, and the July 1 rise is already locked in at 13 per cent, taking a typical direct debit bill to £1,862 a year.
Lewis on wholesale gas
Nearly two per cent was the immediate move in natural gas prices after Sunday evening's announcement ending hostilities between Iran, Israel, and the US. Brent crude also fell 4-5 per cent to just around $82 a barrel, while oil prices were still well above the $66 per barrel level seen before the war commenced.
Martin Lewis said: "The US and Iran signing a framework deal has pushed natural gas prices down. These wholesale prices are a key driver of UK gas and electricity bills. As the six-month graph shows, though, prices still have a long way to fall before returning to pre-conflict levels."
July 1 cap rise
13 per cent is the increase due on July 1 for the current energy price cap, adding £221 to annual bills for households with typical energy usage paying by direct debit. Lewis said the day-to-day consequence could be slightly cheaper fixed tariffs being launched in the coming days, but only if suppliers pass on the softer wholesale market quickly.
The price cap had been steadily declining until the US and Israel launched strikes on Iran, before the Middle East conflict and the closure of the Strait of Hormuz reduced oil and natural gas production and exports. The reopening of the strait in the agreement matters because it helps reverse the supply squeeze that had been feeding through to energy costs.
October cap still higher
£1,862 is where the July bill lands for a typical household, but Lewis warned that the October price cap still looks likely to be significantly higher than it is today without substantial further drops. That warning is the friction point for bill payers: the market has moved in the right direction, yet not far enough to undo the earlier shock.
$82 a barrel crude and a nearly two per cent gas drop are a start, not a reset. If wholesale prices keep falling, fixed deals may edge lower first, then the cap may follow; for now, households on standard variable tariffs still face a higher bill path into autumn.
