Middle East update: Energy market down to pre-war levels

A few weeks ago, we wrote about how the unfolding conflict in the Middle East was introducing fresh volatility into Australian wholesale electricity markets. Futures prices had moved sharply. Retailers had begun widening risk margins. Quote validity windows were shortening – and yes, elements of these conditions remain.

Since then, the headlines have kept coming. But the market, quietly, has done something worth paying attention to: it has kept easing. As of 22 April 2026, ASX energy futures across the National Electricity Market (NEM) are sitting at their lowest sustained levels in close to three years – back to in some cases where prices were before the Ukraine war triggered the global energy shock of 2022.

That is a significant and, frankly, under-reported story. Volatility has not disappeared. But the underlying direction of travel – across futures markets, across the NEM – is down.

Where the futures curve actually sits today

Let’s take Queensland for example. The graph below shows ASX Energy Futures closing prices by day for Queensland, tracked across the 2025, 2026, 2027, 2028 and 2029 contract years. It is a clean view of how the market has repriced over roughly thirty months – and it tells a clear story. This trend is echoed across NSW as well.

_{Source: ASX Energy Futures, QLD, 2023–2026. Zembl market dashboard, data refresh 22 April 2026.}

Three observations stand out.

First, prices have eased from recent peaks. The elevated pricing seen through late 2024 and early 2025 has largely retraced.

Second, the forward curve is relatively flat, with 2027–2029 contracts trading in a narrow band in the low-to-mid $80s. This reflects a combination of improved supply conditions, increased renewable and battery penetration, and more balanced gas market expectations.  

Third, current supply conditions- supported by both baseload generation and strong renewable output - point to a relatively well-supplied winter. However, global fuel markets remain a key risk. Any escalation in geopolitical tensions could flow through to domestic energy costs and tighten supply, placing upward pressure on prices.

A quick recap of how we got here

To appreciate where the market is today, it’s worth remembering where it was.

On 22 February 2022, NSW electricity futures were at $87.25. Within eight months– as the Ukraine invasion, European gas shortages, coal generator outages across the NEM, and tight domestic fuel supply all compounded – NSW futures hit $267.54 on 10 October 2022.  
A 206.6% increase in 230 days. Queensland, Victoria and South Australia followed similar trajectories. Businesses renewing contracts in that window locked in prices they are still paying off today.

Last time we updated this story, in mid-March 2026, the Middle East conflict had driven a fresh but much smaller spike. NSW futures were sitting at $103.70 after a recent peak of $109.73. QLD was at $79.33. VIC was at $76.22. SA was closest to last-year levels at $102.92. The pattern was clear even then: volatility had returned, but from a much lower base than 2022. The market was nervous, not panicked.

Five weeks on, that read has held. Nervousness has eased. The panic never arrived.

Why the market has held its nerve this time

The 2022 shock was, in retrospect, the product of several crises arriving simultaneously: a major European supply war, a global coal and gas squeeze, and a domestic generation fleet under unusual strain. The market priced in a worst-case convergence because the evidence, at the time, supported one.

The 2026 backdrop is different. The Middle East conflict is real and its risks are non-trivial — particularly to LNG shipping and global oil pricing. But the direct exposure of Australia’s domestic electricity market to Middle East supply is modest compared with our exposure to European gas flows in 2022. Domestic generation has meaningfully more renewable and firmed-renewable capacity in the mix than three years ago. And coal prices, gas prices, and forward hedging conditions are all far more orderly than they were in late 2022.

What this means for businesses approaching renewal

Three points are worth making plainly.

One. For any business whose last contract was negotiated at any point between mid-2022 and late-2024, the current market is materially cheaper than what you are currently paying. That is not marketing copy. It is what the forward curve is showing. A structured review of your contract – even before expiry – is worth doing, because the gap between today’s market and yesterday’s contract is large enough to justify the effort.

Two. Low markets are the wrong time to do nothing. The instinct in a rising market is to act quickly; in a falling market, to wait. But waiting assumes the bottom is further away, and the forward curve is already flat – which usually means the market is signalling it doesn’t expect much more downside. A well-timed contract locked now can secure several years of these prices, rather than hoping the dip extends.

Three. Volatility isn’t finished. The Middle East situation remains fluid. Weather, coal supply, and policy changes can all move prices quickly in either direction. A single event can close a favourable procurement window in days. The businesses that do well in markets like this are not the ones predicting the next move; they’re the ones ready to act inside whichever window opens next.

How Zembl is reading the market

Our view is unchanged from our last update, with one important addition: the opportunity has widened. Offers are more readily available. Tender outcomes are tightening. For customers with contracts rolling in the next 12 months, the procurement environment  
is the most constructive it has been since 2021.

That window won’t last indefinitely. But while it’s open, it’s worth using.

We’re continuing to monitor futures movements, retailer pricing behaviour, and the underlying drivers – Middle East developments, NEM generation availability, coal and gas flows, and forward hedge pricing. Our customers get that read directly, paired with a view on their specific contract position and renewal timing.

The bottom line

Energy market commentary tends to get loud when prices are rising and quiet when they fall. The more useful signal is often the quiet one.

Right now, Australian energy futures are trading at levels that a business in early 2022 – before the Ukraine war, before the 2022 energy shock, before three years of volatility – would have recognised as normal. That’s a meaningful reset. It doesn’t mean prices won’t move again. It means the current window is a good one to make decisions in.

Talk to a Zembl energy specialist about your contract position today.

_{Wholesale electricity prices are subject to change and can move quickly in response to weather, outages, fuel availability, and regulatory developments. Current pricing levels do not guarantee future outcomes. All pricing data referenced in this article is sourced from ASX Energy futures (asxenergy.com.au) and Zembl’s market dashboard. Data refresh date: 22 April 2026.}