Gas prices jumped by about 25% on wholesale markets in the UK and Europe in early trading, before easing slightly.
The price of gas in Europe is more than double the level seen before the US-Israeli war with Iran began.
Oil is also trading higher, with Brent crude jumping 10% to nearly $119 a barrel at one point on Thursday morning, before slipping to $114.
UK gas prices are currently up about 25% to around 175p per therm.
The jump comes after Iran's South Pars gas facility – one of the world's largest natural gas fields – was hit on Wednesday evening.
Iran retaliated by targeting a major liquefied natural gas export facility in Qatar, causing "extensive damage", raising concerns over the global energy supply.
The strikes on Ras Laffan follow reports that Israel hit Iran's petrochemical complex on the South Pars gas field.
The latest news rattled stock markets, as investors become increasingly concerned of the potential economic impact of a prolonged conflict.
In Japan, the Nikkei share index closed down 3.4%, and in London the FTSE 100 was down 1.8% on Thursday morning.
