Energy bills to rise for millions as impact of Iran war hits

Household energy bills in Great Britain will rise by 13% in July, adding £221 to a typical annual bill, as the global price shock from the Iran war reaches consumers [1]. The increase, set by regulator Ofgem, will lift the annual cap for a typical dual-fuel household paying by direct debit to £1,862 [1]. The price cap, which fixes maximum unit rates for variable tariffs, affects millions of homes in England, Scotland, and Wales [1]. The primary driver is a 25% surge in the global gas price, triggered by Iran's blockade of the Strait of Hormuz—a chokepoint for roughly 20% of the world's oil trade—in response to the ongoing conflict with a U.S.-Israel coalition [1][3][7]. This closure has stranded oil and LNG exports, causing Brent Crude to surge past $120 per barrel and forcing major exporters like QatarEnergy to declare force majeure [2]. The International Energy Agency has characterized the disruption as the "largest supply disruption in the history of the global oil market" [2]. Shadow Energy Secretary Ed Miliband called the rise "deeply unwelcome news for households across the country" [1]. The increase reverses a recent 7% fall in bills and comes despite Ofgem revising down its estimate of "typical" household energy usage [1]. Even under the new, lower usage estimates, the annual bill is projected to be £1,663, a significant rise from the equivalent current cap of about £1,490 [1]. Craig Lowrey of Cornwall Insight warned the July rise "will be felt across households already stretched by the cost of living" and expressed concern about forecasts pointing to further increases in October as heating demand returns [1]. The war's economic impact extends far beyond energy, with analysts noting a profound shift in the Gulf region's economic model and heightened global risks of stagflation and recession [2][3]. The conflict escalated from earlier exchanges, including the Twelve-Day War in June 2025, which involved direct missile and drone strikes between Iran and Israel [4]. The current crisis has also triggered a concurrent "grocery supply emergency" in Gulf states and widespread disruption to global air travel [2]. For UK households, the latest hike means the typical bill is now about £600 higher than before the price shocks of 2022-23 [1]. Ofgem advises consumers to explore fixed tariffs or change payment methods, while community organizations emphasize practical, low-cost measures like draught-proofing to manage costs [1].