European gas prices advanced after a halt in Egypt’s imports raised risks to the country’s liquefied natural gas flows, while the intensifying Israel-Hamas war added to concerns about a wider conflict.

December futures surged as much as 7.1% before paring some of the gains. Prices are about 30% higher than they were before the war erupted three weeks ago, highlighting Europe’s continued vulnerability to geopolitical events after last year’s energy crisis.

With no gas now flowing from Israel to Egypt, it’s unclear when tanker-borne exports from the North African country might pick up. Egypt uses Israeli gas, as well as its own output, to meet domestic demand and export the fuel via two liquefied natural gas plants. High domestic consumption in the summer halted shipments.

Although Egypt typically provides just a sliver of Europe’s gas, a key threat for energy markets would be an escalation of the nearby conflict to the wider Middle East. The Strait of Hormuz, the gateway to and from the Persian Gulf, is vital for the transport of crude oil and LNG. 

“The gas price jump this a.m. has got supply worries written all over it,” said Ole Sloth Hansen, head of commodities strategy at Saxo Bank A/S. “While supply disruption from Egypt is real, the market is also trying to price in a risk premium related to a wider disruption to supplies through the Strait of Hormuz, the risk of which for now seems limited.”

Europe needs shipments of liquefied gas from any available source after Russia halted most pipeline gas flows in light of its ongoing war in Ukraine.

Supply interruptions have also occurred within the region, with flows from biggest supplier Norway dipping over the weekend after a compressor failure at the Nyhamna gas processing plant.

December futures, the most active contract, gained 3.6% to €54.92 a megawatt-hour by 12:23 p.m. in Amsterdam. The November contract, which expires Monday, rose 2.9% to €52.02 a megawatt-hour.