diff --git a/opm/simulators/wells/BlackoilWellModelGasLift.hpp b/opm/simulators/wells/BlackoilWellModelGasLift.hpp
index 13edca77d3..7276ced0a2 100644
--- a/opm/simulators/wells/BlackoilWellModelGasLift.hpp
+++ b/opm/simulators/wells/BlackoilWellModelGasLift.hpp
@@ -116,6 +116,8 @@ public:
 
     bool maybeDoGasLiftOptimize(const Simulator& simulator,
                                 const std::vector<WellInterfacePtr>& well_container,
+                                const std::map<std::string, Scalar>& node_pressures,
+                                const bool updatePotentials,
                                 WellState<Scalar>& wellState,
                                 GroupState<Scalar>& groupState,
                                 DeferredLogger& deferred_logger);
@@ -143,6 +145,12 @@ private:
                                              GLiftSyncGroups& groups_to_sync,
                                              DeferredLogger& deferred_logger);
 
+    void updateWellPotentials(const Simulator& simulator,
+                              const std::vector<WellInterfacePtr>& well_container,
+                              const std::map<std::string, Scalar>& node_pressures,
+                              WellState<Scalar>& wellState,
+                              DeferredLogger& deferred_logger);
+
     const PhaseUsage& phase_usage_;
 };
 
diff --git a/opm/simulators/wells/BlackoilWellModelGasLift_impl.hpp b/opm/simulators/wells/BlackoilWellModelGasLift_impl.hpp
index 380c85af02..eb70361e01 100644
--- a/opm/simulators/wells/BlackoilWellModelGasLift_impl.hpp
+++ b/opm/simulators/wells/BlackoilWellModelGasLift_impl.hpp
@@ -29,6 +29,7 @@
 #endif
 #include <opm/common/TimingMacros.hpp>
 #include <opm/simulators/wells/GasLiftSingleWell.hpp>
+#include <opm/simulators/utils/DeferredLoggingErrorHelpers.hpp>
 
 #if HAVE_MPI
 #include <opm/simulators/utils/MPISerializer.hpp>
@@ -41,6 +42,8 @@ bool
 BlackoilWellModelGasLift<TypeTag>::
 maybeDoGasLiftOptimize(const Simulator& simulator,
                        const std::vector<WellInterfacePtr>& well_container,
+                       const std::map<std::string, Scalar>& node_pressures,
+                       const bool updatePotentials,
                        WellState<Scalar>& wellState,
                        GroupState<Scalar>& groupState,
                        DeferredLogger& deferred_logger)
@@ -65,6 +68,11 @@ maybeDoGasLiftOptimize(const Simulator& simulator,
         this->last_glift_opt_time_ = simulation_time;
     }
 
+    // update potentials if changed by network (needed by the gaslift algorithm)
+    if (updatePotentials) {
+        updateWellPotentials(simulator, well_container, node_pressures, wellState, deferred_logger);
+    }
+
     if (do_glift_optimization) {
         GLiftOptWells glift_wells;
         GLiftProdWells prod_wells;
@@ -304,4 +312,48 @@ initGliftEclWellMap(const std::vector<WellInterfacePtr>& well_container,
     }
 }
 
+template<typename TypeTag>
+void
+BlackoilWellModelGasLift<TypeTag>::
+updateWellPotentials(const Simulator& simulator,
+                     const std::vector<WellInterfacePtr>& well_container,
+                     const std::map<std::string, Scalar>& node_pressures,
+                     WellState<Scalar>& wellState,
+                     DeferredLogger& deferred_logger)
+{
+    auto well_state_copy = wellState;
+    const int np = wellState.numPhases();
+    std::string exc_msg;
+    auto exc_type = ExceptionType::NONE;
+    for (const auto& well : well_container) {
+        if (well->isInjector() || !well->wellEcl().predictionMode())
+            continue;
+
+        const auto it = node_pressures.find(well->wellEcl().groupName());
+        if (it != node_pressures.end()) {
+            std::vector<Scalar> potentials;
+            std::string cur_exc_msg;
+            auto cur_exc_type = ExceptionType::NONE;
+            try {
+                well->computeWellPotentials(simulator, well_state_copy, potentials, deferred_logger);
+                auto& ws = wellState.well(well->indexOfWell());
+                for (int p = 0; p < np; ++p) {
+                    // make sure the potentials are positive
+                    ws.well_potentials[p] = std::max(Scalar{0.0}, potentials[p]);
+                }
+            }
+            // catch all possible exception and store type and message.
+            OPM_PARALLEL_CATCH_CLAUSE(cur_exc_type, cur_exc_msg);
+            if (cur_exc_type != ExceptionType::NONE) {
+                exc_msg += fmt::format("\nFor well {}: {}", well->name(), cur_exc_msg);
+            }
+            exc_type = std::max(exc_type, cur_exc_type);
+        }
+    }
+    if (exc_type != ExceptionType::NONE) {
+        const std::string msg = "Updating well potentials after network balancing failed. Continue with current potentials";
+        deferred_logger.warning("WELL_POT_SOLVE_AFTER_NETWORK_FAILED", msg + exc_msg);
+    }
+}
+
 } // namespace Opm
diff --git a/opm/simulators/wells/BlackoilWellModel_impl.hpp b/opm/simulators/wells/BlackoilWellModel_impl.hpp
index 7a2142fd9b..8afcd90b0d 100644
--- a/opm/simulators/wells/BlackoilWellModel_impl.hpp
+++ b/opm/simulators/wells/BlackoilWellModel_impl.hpp
@@ -1269,12 +1269,18 @@ namespace Opm {
         bool alq_updated = false;
         OPM_BEGIN_PARALLEL_TRY_CATCH();
         {
-            if (optimize_gas_lift) alq_updated = gaslift_.maybeDoGasLiftOptimize(simulator_,
+            if (optimize_gas_lift) {
+                // we need to update the potentials if the thp limit as been modified by
+                // the network balancing
+                const bool updatePotentials = (this->shouldBalanceNetwork(reportStepIdx, iterationIdx) || mandatory_network_balance);
+                alq_updated = gaslift_.maybeDoGasLiftOptimize(simulator_,
                                                           well_container_,
+                                                          this->node_pressures_,
+                                                          updatePotentials,
                                                           this->wellState(),
                                                           this->groupState(),
                                                           local_deferredLogger);
-
+            }
             prepareWellsBeforeAssembling(dt, local_deferredLogger);
         }
         OPM_END_PARALLEL_TRY_CATCH_LOG(local_deferredLogger,