European natural-gas prices surged to their highest level since early 2023 as hostilities between the U.S. and Iran threaten prolonged disruptions to energy flows.

Dutch front-month futures, Europe's benchmark, are up 25% on the month amid growing concerns over Europe's lower-than-usual winter gas stockpiles.

That's adding to inflationary pressures that are pushing up rate-hike expectations and fueling a bond selloff in Europe and around the world.

Europe is currently a more profitable destination for liquefied natural gas cargoes than Asia, once shipping costs are taken into account, according to analysts at ING. But as the winter approaches, "competition between the two regions is likely to pick up, particularly if Qatari LNG remains largely absent from the market through year-end."