Recent events in the Middle East can feel distant, until they show up in the price of a litre of fuel, or the cost to heat a home. In late February and early March 2026, the confrontation involving Iran raised fresh concerns about shipping safety and energy infrastructure around the Persian Gulf, including the Strait of Hormuz, one of the world’s most important chokepoints for oil and gas trade.
When markets see higher risk in the Gulf, prices often move fast, and because gas plays a central role in both home heating and electricity generation, a gas shock can quickly become a whole‑economy shock.
Here’s how today’s uncertainty could feed into the UK cost of living and why, during volatile times, many households start thinking about heating resilience, including the appeal of a modern wood‑burning stove as a controllable, room‑heating alternative.
Why the Strait of Hormuz matters
The Strait of Hormuz sits between Iran and Oman and connects the Persian Gulf to the open ocean. The U.S. Energy Information Administration (EIA) estimates that oil flows through the strait averaged around 20 million barrels per day in 2024, roughly 20% of global petroleum liquids consumption. That’s why even the risk of disruption can push oil and gas prices higher.
This week’s reporting has described heightened risk to shipping and knock‑on effects on energy exports from the Gulf. Even if traffic is reduced rather than fully closed, insurers, shipowners, and traders can still price in a significant risk premium, and households ultimately feel some of that.
How Middle East instability turns into higher UK gas and electricity costs
The UK has a mix of domestic production and imports, and we receive pipeline gas, notably from Norway, as well as LNG cargoes. But the price we pay for gas is still influenced by wider European and global markets. If major LNG supply is interrupted, or if shipping routes become unsafe, buyers bid up prices to secure scarce cargoes, and the shock spreads.
Electricity is often the surprise. People ask why their electricity bills rise when gas prices spike, even when wind and solar are generating a lot of electricity in the UK. In Great Britain, wholesale electricity pricing is frequently set by the marginal generator, and that is often gas‑fired power. So gas prices can have a significant influence on electricity prices, even when renewables account for a large share of overall generation.
The price cap: why shocks don’t hit immediately, but can show up later
If you’re on a standard variable tariff, the Ofgem energy price cap is the key reference point. It caps unit rates and standing charges, not your total bill – if you use more energy, you’ll still pay more.
For April to June 2026, Ofgem sets the cap for a typical dual‑fuel household paying by Direct Debit at £1,641 per year, with average unit rates of 24.67p/kWh for electricity and 5.74p/kWh for gas, plus standing charges. Ofgem also shows that buying energy for customers (i.e wholesale costs) is the largest part of the cap.
The cap is reviewed every three months, but the wholesale element is based on an observation window that looks back over wholesale prices rather than using today’s spot price. Ofgem has described the cap’s wholesale methodology using a 6‑2‑12 formula (a six‑month observation window, with a timing gap before the cap period begins). This essentially means a sudden spike today is more likely to influence future caps if high prices persist.
So the March 2026 shock matters not just now, but because it can shape the pricing environment for later in the year.
Cost of living: it’s not only energy bills
Energy is often the first place households notice the impact, but it’s not the only channel. When global energy markets become unsettled, the knock-on effects spread through the economy in ways that can feel indirect at first, but quickly add up in day-to-day spending.
To begin with, energy is woven into almost everything we buy. Supermarkets, warehouses and food producers rely on electricity and gas for refrigeration, lighting, heating and processing. Farmers depend on fuel for machinery and transport. Manufacturers use gas and electricity to power equipment, dry materials, heat spaces and run production lines. When wholesale energy prices rise, businesses face higher operating costs, and while some can absorb part of that increase, many eventually pass at least some of it on to customers in the form of higher prices.
At the pump…
Transport is another major channel. Oil price movements can influence the cost of petrol and diesel at the pump, which directly affects household budgets and the cost of moving goods around the country. Delivery fleets, haulage companies and courier services all operate on tight margins. When fuel costs climb, distribution becomes more expensive, and those increases can ripple through retail pricing. Even online shopping, which can feel disconnected from global events, depends heavily on fuel-powered logistics networks.
Air travel and holidays can also become more expensive when oil prices are volatile. Airlines hedge fuel costs, but sustained increases tend to feed into fares over time. For families planning trips abroad or even domestic breaks, this can make discretionary spending more costly, just as other bills are rising.
The broader effect…
There is also a broader inflationary effect. Energy is a foundational input across the economy. When it becomes more expensive, it can contribute to wider price pressures. Businesses face higher utility bills, higher transport costs and potentially higher wage demands if employees are themselves struggling with rising living expenses. This layered effect can make the overall cost of living feel persistently elevated, even if the original trigger was a spike in wholesale gas or oil markets.
Mortgage holders and renters are not immune either. If geopolitical instability contributes to broader economic uncertainty, financial markets can react. That may influence interest rates or borrowing conditions over time, which in turn affect monthly repayments for homeowners and costs for landlords. While this is less immediate than a jump in a gas bill, it can be equally significant for household budgets.
Small businesses are often particularly exposed. Many operate from premises that are costly to heat and light, and they may not benefit from the same purchasing power as larger corporations when negotiating energy contracts. When their costs increase, local prices can follow, from cafés and hairdressers to independent retailers and tradespeople.
What households can do when markets are volatile
No one can control global events, but households can improve their position by focusing on three points:
1. Use less energy (without sacrificing comfort).
Draft‑proofing, insulation and better heating controls reduce the kWh your home needs in the first place.
2. Know your tariff, and shop around where it makes sense.
The price cap is a safety net, not a deal. Depending on the market, fixed tariffs can be cheaper than the cap, but check the terms, length and any exit fees.
3. Add flexibility to your heating set‑up.
If your home relies on a single energy source, you’re fully exposed to that market. If you can heat key rooms efficiently with an additional source, you have more options when prices rise.
Why wood‑burning stoves feel more attractive in uncertain times
In a world where oil, gas and electricity can move sharply on geopolitical news, many homeowners like the idea of a fuel they can see, store and buy ahead of time.
A modern wood‑burning stove can make sense as a complementary heat source because it offers:
Practical warmth where you actually live: Ideal for living rooms, snug areas and open‑plan spaces where you spend the most time.
Optionality: if gas or electricity prices surge, you can choose to use the stove more often and reduce reliance on whole‑house heating.
A different type of budgeting: unlike metered energy bought at the unit price of the day, firewood can be purchased in advance, often outside the peak winter season, and stored for use later.
Our Woodtec FCS Cylindrical Stove:
Is the price of wood truly stable?
Wood fuel isn’t immune to changes in demand, transport costs or wider timber markets. But it is often more stable than globally traded gas and electricity in the sense that it’s frequently sourced locally or domestically and sold as a physical product, rather than repricing daily on wholesale exchanges. UK timber and roundwood prices are tracked using official Timber Price Indices published twice a year, reflecting markets that often move in broader trends rather than minute‑by‑minute spikes. From a household perspective, the ability to buy and store a season’s supply can make costs feel more predictable.
Sourcing your own firewood (for free)?
Over 13% of the UK’s land area is woodland, equating to around 3.2 million hectares, or just under eight million acres. You may be able to source firewood for free, but be very careful. The law states that everything in a wood belongs to the woodland owner. This includes trees, branches, leaves, and logs. Removing logs from a woodland without the permission of the land owner would be considered theft. Therefore, it is essential to have the consent of the woodland owner before you take any wood home with you. Assuming you have permission, you may very well be able to source firewood for free.
Burning responsibly: the right appliance, the right fuel, the right habits
Any discussion of wood‑burning should include clean‑air rules and good practice.
Smoke Control Areas: In smoke control areas in England, you must not emit smoke from a chimney, and you can only use certain fuels or exempt appliances.
Fuel quality: the Ready to Burn scheme (administered by Woodsure on behalf of Defra) supports regulations designed to reduce harmful pollution by ensuring firewood sold in volumes under 2m³ is certified with a moisture content of 20% or less.
Better burning: dry fuel, correct air settings and avoiding long slumbering burns reduce smoke and improve efficiency.
And because safety matters as much as comfort, always use a carbon monoxide alarm and ensure professional installation and ongoing maintenance (including sweeping) for any stove and flue system.
No one can predict how long the current tensions will last, or what markets will do next month. But energy markets remain sensitive to geopolitical shocks, and household resilience is increasingly valuable.
For many UK homes, the most sensible response is a blend of efficiency, flexibility (have options) and responsible, modern heating choices. A wood‑burning stove won’t suit every property — but for the right home, installed and used correctly, it can be a practical way to make winter warmth feel a little less dependent on distant events and fluctuating markets.
