European gas prices hit a four-month high on Monday as escalating tensions between the US and Iran fuelled fears of a supply crunch this winter.
Benchmark gas prices rose above €60 per megawatt hour before easing back to around €58.5/MWh.
The move followed fresh strikes between the US and Iran over the weekend and renewed concerns over shipping through the Strait of Hormuz.
The waterway handles around a fifth of global oil and gas flows, making any disruption a major risk for energy markets.
Analysts warned Europe may need to outbid other buyers for scarce liquefied natural gas cargoes to avoid shortages during the winter.
European gas storage is currently less than 54% full, compared with 64% at the same point last year.
Energy consultancy ICIS said Europe should still be able to refill storage to around 80% before winter, but warned that the cost of doing so is rising sharply.
ICIS estimated the Continent may need to pay around €54/MWh through the autumn to rebuild supplies, rising to as much as €60/MWh if winter starts colder than expected.
Global LNG supplies are already tight following disruption to Qatari exports, with ICIS cutting its forecast for global LNG supply this year from 441 million tonnes to 431 million tonnes.
Oil markets also remained volatile, with Brent crude briefly rising above US$90 a barrel on Sunday.
Traders warned that any renewed closure or disruption in the Strait of Hormuz could place further pressure on already tight energy markets.
