European natural gas prices continued to rise in early trade on Monday due to rising concerns about a potential expansion of the Israeli-Iranian conflict and its impact on global energy markets.
Benchmark futures rose as much as 2.2% to the highest since early April after jumping 4.8% on Friday.
Open hostilities between Israel and Iran entered a fourth day with no sign of easing, stocking fears of a broader conflict in the energy-rich region.
For gas traders, the biggest concern is that a further escalation could disrupt shipments through the Strait of Hormuz, a key waterway for seaborne supplies.
While physical delivery of liquefied natural gas doesn’t currently appear to be affected, any interruption would strain the market at a crucial time in Europe’s stockpiling season.
Tensions between the two long-time adversaries flared into direct conflict on Friday, when Israel launched surprise attacks on Iranian military and nuclear sites. In retaliation, Tehran has launched barrages of missiles and drones, hitting Israeli cities and towns.
Traders in Europe are also watching for any further disruptions to exports from Norway, the region’s biggest supplier of piped gas, as key facilities undergo seasonal maintenance. That comes as the weather warms across much of the continent, boosting energy demand for air-conditioning.
Dutch front-month futures, Europe’s gas benchmark, rose 1.81% to €38.85 a megawatt-hour at 8:00 a.m. in Amsterdam.
Meanwhile, the European Union aims to work with the United States to prevent a sharp rise in energy prices caused by the conflict between Israel and Iran.
Speaking ahead of the official opening day of the summit of the Group of Seven (G7) leading industrialized democracies in Canada, European Commission President Ursula von der Leyen said on Sunday she had discussed the issue with US President Donald Trump and that they were prepared to coordinate with like-minded partners to ensure market stability.
She said the EU was vigilant about the impact of the conflict on international energy markets.
Von der Leyen did not specify what measures were being considered to counter large price fluctuations. In theory, strategic oil reserves could be released or talks sought with key oil-exporting countries.
The conflict's effects are already being felt at German petrol stations, where prices of petrol and diesel rose noticeably over the weekend, according to figures from the ADAC automobile association.
The increases come amid reports from Iran that Israeli airstrikes have targeted key oil and gas infrastructure, fueling fears of broader supply disruptions.
