European gas prices hit highest level since 2023; Significant losses at stock exchange

European natural gas prices briefly climbed past €80 per megawatt-hour on Wednesday afternoon, reaching a level not seen since January 2023. The Amsterdam Stock Exchange (AEX) closed with a significant loss in Amsterdam due to the prices, with investors concerned about the risk of inflation.

The conflict between the United States and Iran has pushed up prices for natural gas and liquefied natural gas as well as oil. Ongoing fighting has left the Strait of Hormuz, a crucial energy shipping route, almost entirely blocked.

In the meantime, conflicts between Saudi Arabia and Houthi rebels in Yemen have also escalated, which has led to more difficulties for world trade. The suspicion is that the Houthis want control over Bab al-Mandeb, a maritime strait between Yemen and the Horn of Africa that offers access to the Red Sea.

The energy bills are likely going to be higher for many people. Netherlands Authority for Consumers and Markets (ACM) has said that gas prices under standard energy contracts rose by more than 6 percent in August compared with July. Prices were more than 11 percent higher than they had been a year earlier.

Brent crude climbed past $100 a barrel as tensions between Iran and the United States flared up again.The AEX index dropped by 1.3 percent to 1101,89 points. The MidKap dropped 0.9 percent to 1098,01 points. The stock exchanges in Frankfurt, Paris, and London dropped by 1.9 percent.

Gas prices climbed as well. A megawatt-hour of natural gas briefly traded above €80 on the Dutch gas exchange, which serves as a benchmark for European gas prices. It was the first time prices had reached that level since January 2023.

The rise in oil prices came after the U.S. hit Iranian tankers and retaliatory Iranian attacks on US warships and oil tankers in the Persian Gulf.