May 2026 was marked by the second warmest sea surface temperature (SST) on record for the month, averaging 20.90°C in the 60°S-60°N band, according to the Copernicus Climate Change Service (C3S). This temperature was only slightly lower than the record set in May 2024 at 20.93°C.
Climate Drivers
The European Centre for Medium-Range Weather Forecasts (ECMWF) reported that the global surface air temperature for May 2026 was 15.81°C, which is 0.55°C above the May 1991-2020 average. This increase is part of a broader trend of rising global temperatures, with May 2026 being 1.42°C higher than the pre-industrial average (1850–1900).
Supply Side Impacts
The warming trend has significant implications for energy markets, particularly in regions experiencing extreme weather. For instance, Western Europe faced one of the earliest and most intense heatwaves on record, affecting countries like France, the UK, Ireland, and Portugal. Such conditions can disrupt energy supply chains and increase demand for cooling, impacting energy prices.
Demand Side Trends
The shift towards El Nino conditions in the equatorial Pacific, as noted by C3S, is expected to influence global weather patterns, potentially increasing energy demand in regions prone to heatwaves. Additionally, wetter-than-average conditions in parts of North America, Asia, and Australia contrast with drier conditions in the central US and South America, affecting agricultural outputs and energy consumption patterns.
Price Outlook
As the climate continues to warm, energy markets must adapt to more frequent and intense weather events. The upcoming months will be crucial as El Nino conditions develop, potentially leading to further disruptions in energy supply and demand. Stakeholders should monitor updates from organizations like the ECMWF and C3S for the latest climate data and projections.
| Month/Year | SST (°C) | Rank |
|---|---|---|
| May 2024 | 20.93 | 1st |
| May 2026 | 20.90 | 2nd |
The ongoing trend of rising sea surface temperatures underscores the need for strategic planning in energy procurement and trading, as climate extremes become more frequent and impactful.
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