Gas prices have leapt at the fastest pace since the outbreak of war in Ukraine, after Qatar halted production of liquified natural gas after attacks by Iran.

Oil prices also soared and global financial markets reeled from the fallout of an intensifying conflict between Iran and US-Israeli forces.

European whole gas prices soared by 52% on Monday, marking the sharpest rise since prices were pushed dramatically higher by the Russian invasion of Ukraine in March 2022.

The surge came after Qatar’s state-backed energy company QatarEnergy said it “ceased production” because of attacks on its facilities.

Qatari ministers had said earlier on Monday that an Iranian drone had attacked one of the company’s production facilities.

Qatar is a major producer of LNG, cooled gas which can be transported via ships, responsible for about a fifth of global supplies.

On Monday in London, the price of natural gas for delivery in April was up by about 43% to 115p per therm.

In the UK, gas prices are a key driver for the cost of domestic energy bills, indicating that a sustained spike could affect households in the coming months.

Neil Wilson, Saxo UK investor strategist, said: “Qatar is a top three LNG exporter, controlling roughly a quarter of expected supply over the next decade.

“Looks like Iran’s tactic is to pressure Gulf states so they in turn pressure the US and Israel to back off.

“I am much more concerned about European natural gas prices than oil prices, in terms of seeing a repeat of the 2022 European energy crisis.”

Global financial markets faltered after intense strikes across the Middle East and attacks on ships drove fears of energy supply disruption.

London’s FTSE 100 was weaker as trading was knocked by the growing conflict between Iran and US-Israeli forces.

The blue chip share index shed 130 points, closing 1.2% lower at 10,780.11.

Other European indexes suffered bigger drops with France’s Cac 40 down about 2.2% and Germany’s Dax tumbling 2.4% on Monday.

But it was a more tentative start to trading over on Wall Street with the S&P 500 relatively flat, and Dow Jones dipping by about 0.1% by the time European markets had closed.

Israel launched strikes on Lebanon’s capital Beirut on Monday after missiles were fired by militant group Hezbollah.

The latest strikes came after the US and Israel hit targets across Iran on Sunday as part of an intensifying military campaign which followed the killing of Supreme Leader Ayatollah Ali Khamenei.

Oil supplies could be affected by the conflict after Iran reportedly warned tankers on the strait of Hormuz that no ships would be allowed to pass through.

UK Maritime Trade Operations Centre officials said that two vessels have been struck near to the key trade artery.

The Strait of Hormuz is used by tankers carrying about one fifth of the world’s oil supplies and seaborne gas.

On Monday, the price of Brent crude oil soared by as much as 13%, rising above 82 dollars a barrel, before paring back.

It was 8.4% higher at 79.2 dollars a barrel shortly before 2pm, before easing slightly to be 5.5% higher at 76.9 dollars a barrel by early evening.

Nevertheless, City analysts have said the markets have been relatively contained so far in reaction to the conflict.

Chris Beauchamp, chief market analyst at IG, said: “While we have seen a significant surge in oil prices since markets opened last night, the gains appear contained for now as we wait to see if shipping through Hormuz can continue at lower levels or will be blocked entirely.

“Oil and gas infrastructure in the region has not yet been extensively targeted, keeping oil well south of the 100 dollar barrel range that many expected as a result of the weekend.”

Meanwhile, the pound dipped in value against the US dollar to its weakest level since December.

The fall is partly linked to the strength of the dollar, with investors pouring funds into the US “safe haven” currency.

The pound was down about 0.8% at 1.338 versus the dollar during the day, before parring back some losses to be down around 0.3% at 1.34 against the dollar by early evening.

London stocks were broadly weaker, with travel stocks among those dropping particularly sharply.

Cruise giant Carnival slid by 8%, while airline firm IAG, the parent firm of British Airways, dipped by 7.6%.

Rival Wizz Air, which typically runs flights to Dubai and Abu Dhabi, was also down 7.3% in early trading on Monday, while travel-focused retail groups SSP and WH Smith were also firmly lower.

However, defence stocks were among the gainers, with BAE Systems lifting by 7.4% to 2,268p.

Elsewhere, oil and energy stocks were also stronger – Shell and BP rose by 4.5% and 3.5% respectively as prices lift.

International stock markets also opened weaker after the start of trading, with the Nikkei 225 in Tokyo falling by 1.5% after Asian markets opened.