Energy costs could stay painfully elevated for years regardless of how quickly the Iran conflict is resolved, with analysts warning that the damage to global gas markets has already gone deep enough to outlast any ceasefire.

LCP Delta, the consultancy that advises the Government on the UK power market, has crunched the numbers and arrived at a sobering conclusion: wholesale electricity is set to cost around 40 per cent more this year than before the war began, with prices remaining 18 per cent above pre-conflict levels through 2026.

Chris Matson, a partner at LCP, said: “Consumers are protected in the short term due to the price cap but eventually these rises will filter through into consumer bills.”

The gas market tells an even starker story. LCP Delta puts average prices at 70 per cent above pre-war projections for the current year, easing only partially to 36 per cent above baseline through 2027. Crucially, those figures assume no further deterioration — they reflect only what has already happened in the Middle East.

Why the pain will linger

The mechanism driving the long-term outlook is storage. Even if tankers carrying liquefied natural gas begin clearing the Gulf again tomorrow, months of near-zero flow have left European reserves badly depleted.

Refilling them will sustain demand — and therefore prices — deep into next year, regardless of what happens at the front line.

The weight attached to LCP Delta’s assessment is significant.

The firm is among those the Government has specifically commissioned to map out scenarios for the UK power market, meaning its conclusions land directly on ministerial desks.

Reeves faces growing pressure

The projections are sharpening calls for the Chancellor to act. Rachel Reeves is facing mounting demands to construct a financial lifeline for households and businesses confronting what could be a sustained and severe rise in energy costs.

The industry body Energy UK has calculated that bills could be £250 higher annually from July — solely as a result of the war — and has demanded ministers “immediately step up efforts” to shield the most vulnerable from the coming increases.

On Monday, Sir Keir Starmer announced £53million in emergency support for households hit by the sudden surge in heating oil prices, which have more than doubled in a matter of weeks.

The funding will be absorbed into the new Crisis Resilience Fund from April, and will sit within the Household Support Fund until that point. However, the £250 increase will seriously dent Starmer’s plans to soften the Middle East oil shock.