Natural gas futures in Europe surged as much as 30% in early trading today, surpassing €69 per megawatt-hour, marking the highest level since January 2023. This jump extends a nearly 67% rally recorded last week, driven by rising uncertainty from the ongoing US-Israeli war on Iran, which continues to unsettle energy markets and raise concerns over prolonged supply disruptions, according to Agence France-Presse and Bloomberg.

The spike in gas prices followed a sharp increase in oil futures, which climbed to USD 120 per barrel earlier in the morning. The rise reflects supply constraints as key Middle Eastern producers cut output and the Strait of Hormuz remains effectively closed. U.S. natural gas futures also reached their highest levels in a month, highlighting global market pressures.

Now in its tenth day, the conflict shows no sign of abating, intensifying energy market volatility and inflationary pressures. Last week, Qatar Energy halted operations at Ras Laffan, the world’s largest liquefied natural gas (LNG) facility, further tightening supply. European gas markets face particular vulnerability as winter ends with EU storage stocks running low. This will necessitate additional LNG imports over the summer, competing with Asian buyers amid constrained global supply.

Russia also warned last week that it might halt natural gas exports to Europe, adding to concerns over regional energy security.

Meanwhile, G7 finance ministers are set to meet on Tuesday to discuss a coordinated oil release in partnership with the International Energy Agency, a move reported by the Financial Times. This intervention helped moderate some of the morning’s price surge, bringing April futures at the Dutch TTF gas hub back to €62 per megawatt-hour, though this still represents an intraday increase of nearly 16%.