Publication date: March 17, 2026
Japanese Futures Jump to Record Levels Amid Middle East Tensions
The outbreak of war in the Middle East has triggered a sharp increase in prices and trading volumes of Japanese electricity futures on the European Energy eXchange (EEX).
- On March 3, trading volume reached 4,905 GWh, significantly surpassing the previous record of 2,819 GWh.
- The volume of futures traded on that day was 6.4 times higher than the 767 GWh of spot electricity traded on the Japan Electric Power Exchange (JEPX).
- Futures prices also rose sharply. The Tokyo area fiscal year 2026 product reached JPY 16.38/kWh on March 3, a 34% increase in just two business days.
Currently in Japan, only private companies, such as electricity and gas utilities, hold LNG reserves. These normally cover just two to four weeks of consumption, leaving the supply situation extremely tight – which will affect electricity prices for household and corporate customers. Increased fuel prices for March will likely be reflected in household electricity tariffs between June and November. For corporate customers, an increase in price will be seen as early as April in Tokyo Electric Power’s (TEPCO) service area, after it announced the introduction of a new mechanism under which increases in fuel prices are reflected in the following month’s electricity bills.
🔍 Shulman Commentary: Although EEX futures show an immediate price spike, the Tokyo baseload forward curve starts to flatten around August, indicating that traders anticipate the crisis will significantly improve or be resolved by late summer. In the meantime, LNG supply disruptions from the Middle East may force electricity companies to secure LNG from alternative exporters or to rely more on other generation sources, such as oil-fired or coal-fired power plants. As the uncertainty persists, market participants will need to adjust procurement and hedging positions as LNG supply risks evolve, with particular attention to developments in LNG supply conditions and regional geopolitics.
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