European natural gas topped €97 a megawatt-hour for the first time since 2022 as concerns mount about the region’s fragile supply balance this winter and the outlook for the Middle East conflict.

Benchmark futures extended last week’s advance by as much as 3.5% early Monday. Traders expect an uptick in heating demand in the coming days, with temperatures set to drop across the continent. That would coincide with tight global gas supplies and set the stage for bidding wars with other buyers, such as Asia.

Expectations are fading that the market could ease any time soon amid continued hostilities and supply disruptions in the Persian Gulf. Iran is bracing for a fresh US bombing campaign around America’s November midterms and is preparing to retaliate across the Middle East, Bloomberg News reported.

Volatile liquefied natural gas flows have played a crucial role in supplying Europe’s energy since the 2022 crisis, leaving it vulnerable to potential disruptions as the continent enters its peak-demand season with abnormally low fuel inventories. EU gas-storage sites are about 75% full, the lowest for the season in records going back to 2009, while those in Germany are at just over 61%.

European gas prices are still well below the peaks of the last energy crisis, but the latest advance risks fanning inflation and weighing on economic activity. So far in October, Europe’s LNG imports have lagged last year’s levels despite typically jumping this time of year.

Dutch front-month futures, Europe’s gas benchmark, traded 3.2% higher at €96.88 a megawatt-hour by 8:50 a.m. in Amsterdam. As a result of the rising gas prices, French month-ahead power futures exceeded €200 a megawatt-hour for the first time since January 2023.