Oil prices fall after US waives Iran sanctions and peace talks in Switzerland progress – business live
Key events
Britain’s grid operator plays down blackout risks this winter
Mark Sweney
Great Britain’s grid operator has played down the risks of blackouts this winter, despite European gas storage levels dropping below the level seen during the 2022 energy crisis, my colleagues Mark Sweney and Jillian Ambrose report.
The National Energy System Operator (Neso) expects Britain’s electricity supply over winter to outstrip demand by almost 8.8%, with supplies expected to reach an almost five-year high.
Neso said that surplus supply levels dropped to as low as almost 6% the winter following Russia’s invasion of Ukraine four years ago, while this year is expected to almost match 2025’s 9% level, which marked a five year high.
However, Neso’s report noted that across the European Union gas storage levels are at a four-year low, 7% below the level recorded at the same time in 2022.
Gas plants are regularly used to bolster power supplies in the colder months when freezing temperatures drive demand for energy higher, or when wind and solar power is in short supply.
European gas storage reached 41% of capacity on 3 June, thirteen percentage points lower than the 10-year average, eight percentage points lower than last year, and seven percentage points below 2022 levels. Neso said in its report:
This means injection rates for the remainder of the summer must be high to meet regulatory targets by the start of winter.
The company, which was acquired by the government from National Grid two years ago, instructs which of the available power plants, batteries and renewable projects such as wind and solar power will generate on a daily basis to maintain a balance between supply and demand.
Deborah Petterson, director of whole energy system resilience at Neso, said:
This has been a year of turbulence in energy markets and geopolitical uncertainty. However, Great Britain’s electricity system has a strong track record of reliability. Sufficient electricity margins [are] expected throughout winter. Households and businesses can be confident that electricity supplies remain secure.
The expected buffer also means that power supply levels will be maintained even if the conflict in the Middle East were to result in gas supply shortages to power plants in Great Britain.
Gas plants are typically called on to generate electricity when wind and solar power are in short supply.
Last year, about 14% of the UK gas supply came from imports – the UK relied on gas imports sourced from countries including the US and Qatar – but this is expected to rise sharply to a quarter by 2030, and almost half by 2035.
Great Britain’s gas use fell by 4% on average last winter, compared to the winter before, according to National Gas, which owns and operates the country’s gas pipeline network.
But the operator warned that while even as the country’s gas use declines “rapid swings in demand are coming more common due to the role gas power plants play in ramping up generation when renewable energy output drops, “placing greater stress on the system at times of highest need”.
Glenn Bryn-Jacobsen, a director at National Gas, said:
Operating conditions are becoming increasingly dynamic, with the system no longer characterised by steady demand patterns but by sharp swings driven by weather and renewable output.”
Its annual winter review showed that on the coldest day of last winter, 5 January, gas plants ramped up over ten-fold from around 2.3 gigawatts the previous day to 26.1GW, due to a slump in wind power.
This represented the largest swing in gasfired generation ever recorded over a 36hour period, according to National Gas figures. The daily peak for winter gas demand was also the second highest recorded in five years, it said. Bryn-Jacobsen said:
While this demonstrates the strength of the current system, it also underscores the increasing complexity of operating and balancing the network.
Introduction: Crude oil falls after US waiver on Iran sanctions and peace talks progress
Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy.
Crude oil has fallen, after the United States waived sanctions on Iran for 60 days from Monday after the first talks to negotiate a permanent peace deal.
US vice president JD Vance said talks with Iranian officials in Switzerland had laid a “good foundation for a successful final deal” to end the war.
Brent crude fell 1.4%, more than $1, to $76.83 a barrel in early London trading, taking it closer to the $72 a barrel level seen before the US and Israel launched missile attacks on Tehran on 28 February.
The US and Iran agreed a roadmap towards a permanent agreement, building on the interim deal signed last week, within 60 days in the Qatari-owned mountain resort of Bürgenstock, according to mediators Pakistan and Qatar.
They also agreed on a mechanism to end fighting in Lebanon between US ally Israel and Iran-aligned Hezbollah, and opened a communications line to help ensure safe passage for commercial ships through the strait of Hormuz.
The US Treasury announced a waiver until 21 August on sanctions, allowing Tehran to sell oil and related products.
Asian shares fell sharply, however, and European and US stock futures are pointing to a lower open later, as amid mounting expectations that the Federal Reserve may take a more aggressive approach to tackle inflation later this year. Japan’s Nikkei tumbled 3.3% while South Korea’s Kospi plunged 9.3% and Hong Hong’s Hang Seng dropped 1.9%.
A full decade has passed since the Brexit referendum. Today marks the 10-year anniversary of the UK’s fateful vote to leave the European Union.
The Agenda
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8.15am BST-9am BST: France, Germany, eurozone S&P Global PMI surveys (flash ) for June
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9.30am BST: UK S&P Global PMIs flash for June
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11am BST: CBI Industrial trends survey
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1.15pm BST: US ADP jobs change weekly report
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2.45pm BST: US S&P Global PMIs flash for June
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6.30pm BST: Bank of England policymaker Swati Dhingra panel discussion at King’s College London: Brexit ten years on