While some fuel-related impacts of the Iran War — such as the price we are paying at the gasoline pump — are already visible, others, such as the impact on residential customers’ electric bills, may still be months away, particularly for customers in the Northeast. In 2025, New England generated 55% of its electricity from gas. During the winter months, liquefied natural gas (LNG) often sets regional prices in New England because it acts as the marginal source of supply when the pipeline is constrained. While the United States as a whole imports less than an average of 0.1 billion cubic feet per day a year of LNG, almost all of those imports flow into New England between November and March each winter season.

Twenty percent of global LNG production sits behind the Strait of Hormuz, which is currently closed due to the Iran War. Additionally, major LNG infrastructure in the region has been damaged, severely curtailing supply. Analysts warn that a prolonged disruption could trigger a supply squeeze comparable to the 2022 shock following Russia’s invasion of Ukraine. Due to the timing of the utility’s procurements in New England, supply rates are likely to increase heading into the 2026-2027 winter season. Four New England states have upcoming auctions to procure default electric supply over the next quarter.

This issue brief explains why the Iran War threatens to cause severe electricity spikes by explaining the link between natural gas and electricity markets; the immediate threats from the ongoing war to utility procurements; and vulnerabilities in the Northeast region. The brief also points to lessons that elected officials and policymakers can draw from the aftermath of Russia’s invasion of Ukraine, in terms of electricity price impacts, especially during the 2022-2023 winter period, and outlines policy actions to protect consumers who are already suffering from high utility bills.