The Iran Conflict & Energy Prices:
What C&I Buyers Need to Know

Let me be direct about something: I've been in the energy business long enough to have watched a lot of geopolitical events that were supposed to send prices through the roof and didn't — and a few that quietly did a lot of damage before anyone noticed. The current situation involving Iran is one I'm watching closely, and I think it deserves more attention from C&I energy buyers than it's getting.

This isn't a political article. I'm not going to tell you what should happen diplomatically or militarily. What I can tell you is how the physical energy supply chains connect to what you pay for electricity and natural gas here in Texas — and what the realistic price scenarios look like from where I sit.

The Connection Between Iran and Your Energy Bill

The link isn't as direct as you might think — and it's also more durable than most people realize.

Iran produces approximately 3–3.5 million barrels of oil per day, making it one of the larger producers in the world. More importantly, it sits adjacent to the Strait of Hormuz — the narrow waterway through which roughly 20% of global oil supply, and nearly 20% of global LNG exports, pass every day. About 17 million barrels of crude oil move through that strait daily.

When conflict escalates in that region, markets price in the risk of supply disruption, not just actual disruption. Oil traders and natural gas markets don't wait to see what happens — they bid prices up in anticipation. That's important to understand: you don't need a pipeline to blow up or a tanker to get hit for prices to move. The threat alone does it.

Natural Gas Is the Direct Line to Your Electric Bill in Texas

Here's the piece that matters most for Texas C&I buyers: ERCOT is a natural gas-dominated grid. Natural gas-fired power plants set the marginal price of electricity in Texas the overwhelming majority of the time. When natural gas prices go up, wholesale electricity prices follow — it's that direct.

The U.S. is now a major exporter of LNG (liquefied natural gas). We've built out enormous export capacity over the last several years, which was great for the domestic gas industry and U.S. energy geopolitics — but it also means domestic natural gas prices are now more tightly coupled to global LNG demand than they used to be. When global LNG demand spikes because of a supply disruption somewhere, U.S. gas exports increase, and domestic prices rise to reflect that competition for supply.

In short: a conflict that disrupts Middle Eastern LNG supply, or even credibly threatens to do so, can tighten global LNG markets, pull U.S. LNG exports higher, and push Henry Hub gas prices up — which then flows directly into ERCOT wholesale prices.

Where Prices Could Go: Three Scenarios

I want to be honest that forecasting commodity prices is humbling work — the market has a way of making everyone look wrong. But thinking through scenarios is useful, and here's how I frame it:

Who Is Most Exposed Right Now?

Not all C&I customers are equally exposed to this risk. Here's a quick way to think about your situation:

If you're on a fixed-price contract that runs through this period, you're insulated from near-term price movements. Your contract locks in the price — that's exactly what it was designed to do. Your main focus should be on what happens at renewal.

If you're on an index or floating rate contract, you're directly exposed to market movements right now. Any escalation flows through to your bill quickly. This is the population that should be paying the closest attention and thinking hardest about whether to fix.

If your contract is coming up for renewal in the next 6–12 months, timing matters significantly. The decision of when to lock in a new contract could be worth real money depending on how this situation evolves. This is not the time to let a contract auto-renew without thinking about it.

What Should You Actually Do?

A few practical steps worth taking right now, regardless of which scenario plays out:

Know your contract status. When does your current electricity and natural gas contract expire? If you don't know this off the top of your head, find out. This is the most important piece of information you have in a volatile market.

Understand your price structure. Are you on a fixed rate, an index, or something in between? If you're not sure, pull out your contract or ask your current supplier. The answer shapes everything else about your risk exposure.

Have a procurement timing conversation. In a market with elevated geopolitical risk, the question of when to lock in a new contract is more consequential than usual. That decision should be informed by current market levels, the forward curve, and your risk tolerance — not by a contract expiration date approaching without a plan.

Consider your natural gas exposure separately. Electricity and natural gas are separate commodities with separate procurement decisions. If you have significant direct natural gas consumption, the exposure there warrants its own analysis.

Don't let volatility paralyze you. One of the most common mistakes I see in volatile markets is waiting too long for the "perfect" moment to act. A contract signed at a reasonable price with manageable risk is better than a perfect price that never came while you were on month-to-month rates.

The Bottom Line

The Iran situation adds a meaningful layer of uncertainty to energy markets that were already more volatile than usual coming into 2026. For C&I buyers in Texas, the connection is real: through LNG markets, through natural gas prices, through ERCOT wholesale power costs.

The good news is that this is manageable — with the right information, the right timing, and an advisor who's paying attention to the market on your behalf. That's what we do.