Trump weighs limited Hormuz strikes to curb Iranian threats - report

European natural gas prices surged on Monday after U.S. forces engaged Iranian missile sites in the Middle East, causing a spike in panic over European gas supply security ahead of the heating season. The Dutch benchmark contract for front-month gas jumped by 3.15 euros to 70.10 euros per MWh, breaking the 70-euro mark for the first time in months.

Trading in British wholesale gas markets halted for a public holiday on Monday, allowing European energy traders to incorporate a heightened risk premium stemming from the conflict. The Middle East military escalation heightened concerns over liquefied natural gas (LNG) supply risks, as the Strait of Hormuz, which transports about 20% of global LNG, could face prolonged closures.

This prospect amplified competition between European utilities and Asian buyers for available spot LNG cargoes. Rising energy costs and inflationary pressures loom over European industries as they anticipate a possible interest rate hike from the European Central Bank during its Sept. 10 meeting, given the mounting evidence of persistent inflationary pressures.