LONDON

European natural gas prices started the week with a sharp 28.5% increase as concerns over global energy supply intensified.

The rally in European gas prices accelerated after commercial shipping through the strategically vital Strait of Hormuz nearly came to a halt following joint US and Israeli strikes on Iran and the suspension of production at a liquefied natural gas (LNG) facility operated by QatarEnergy.

At the Netherlands-based Title Transfer Facility (TTF), Europe's most liquid gas trading hub, April futures contracts closed at €31.95 per megawatt-hour on Feb. 27, before the US and Israeli strikes on Iran.

Within a week of the attacks, prices surged 67% to €53.4 per megawatt-hour.

Following the escalation of attacks between the US, Israel and Iran, gas prices opened Monday at €68.5 per megawatt-hour as of 10 a.m. local time (0700 GMT), marking a 28.5% increase from last Friday's closing level.

The drop in Europe's gas storage levels to below 30% capacity has also added upward pressure on prices.

Around 20% of global LNG exports pass through the Strait of Hormuz, while 93% of Qatar's LNG exports—from one of the world's largest LNG exporters—transit the strait before reaching international markets.

After Iran's Islamic Revolutionary Guard Corps targeted commercial vessels linked to the US and Israel using the strait, the number of ships able to pass through the waterway fell to just one as of March 7, with no oil or LNG shipments recorded.