European and British natural gas prices surged on Wednesday to their highest levels since 2023, as a fresh military escalation in the Persian Gulf and a deepening supply crisis pushed markets beyond earlier peaks during the fifth month of the Middle East conflict. The Dutch front-month contract rose to 74.32 euros per megawatt-hour, while Britain’s equivalent NBP wholesale contract reached 183.95 pence per therm. The escalation has intensified risk pricing as traders prepare for possible disruptions to liquefied natural gas (LNG, supercooled gas shipped by sea) routes ahead of winter. Strikes on Islamic Revolutionary Guard Corps (IRGC) sites and retaliatory missile attacks on U.S. air bases in Jordan have sharply reduced commercial traffic through the Strait of Hormuz. Although Washington says the waterway remains open, maritime tracking data indicates shipping is operating at a fraction of pre-war levels. U.S. President Donald Trump has threatened "harder" military action, including possible strikes on Iran’s Kharg Island export facility, reducing traders’ expectations of an immediate diplomatic solution. The effective closure threatens roughly 20% of global seaborne LNG transit, mainly from Qatar, forcing European buyers to compete with Asian utilities for uncommitted Atlantic basin cargoes. European storage was approximately 62% full, below the five-year seasonal average, after heatwaves increased gas-fired power demand and Norwegian offshore maintenance and delayed Qatari shipments constrained August injections. Trading desks warn that prolonged losses of seaborne LNG through autumn could expose Europe to price spikes and potential supply rationing during extended winter cold snaps. Higher energy costs also complicate the European Central Bank (ECB, euro-zone central bank) policy outlook before its Governing Council meeting on Sept. 10. Preliminary August Eurozone data showed core inflation easing slightly to 2.4%, while headline inflation accelerated to 3.3%, driven mainly by a 14.3% increase in energy components.